Term
| Product Costs (aka Inventoriable Costs) |
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Definition
| Cost assigned to goods that were either purchased or manufactured for resale; are inventoried |
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Term
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Definition
| all costs that are not product costs (ex. R&D, admin, and selling) and are expensed |
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Term
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Definition
| Direct Material + Direct Labor |
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Term
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Definition
| Direct labor and overhead |
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Term
| Schedule of Cost of Goods Manufactured |
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Definition
| Direct Material [Beg Inv + Purchases - End Inv] + Direct Labor + Manufacturing Overhead [ind material + ind labor + depr + utilities + insurance] + Beg WIP - End WIP |
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Term
| Schedule of Cost of Goods Sold |
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Definition
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Term
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Definition
| each distinct batch of production is called a job or job order; cost acct procedures are designed to assign costs to each job; used when products are manuf in very low vol or one at a time |
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Term
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Definition
| accumulates all the production costs for a large number of units of output, and then these costs are avg over all the units; used by comp that prod large #s of identical units |
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Term
| Predetermined Overhead Rate= |
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Definition
| (Budg Manuf Ovhd Cost)/(Budg Amt of Cost Driver) |
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Term
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Definition
Quantity Used * POHR
Debit WIP and Credit Manuf Ovh |
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Term
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Definition
| When Actual Manuf Ovh < Applied Manuf Ovh |
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Term
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Definition
| When Actual Manuf Ovh > Applied Manuf Ovh |
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Term
| Difference Bettwen ABC and Traditional |
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Definition
| ABC has different cost pools for each activity; traditional just uses 1 |
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Term
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Definition
1) Overhead costs are assigned to activity cost pools associated with significant activities.
2) Ovh costs are allocated from each activity cost pool to each product in proportion to its consumption of the activity. Each activity has its own cost driver.
See p 173 |
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Term
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Definition
| type of activity must be done for each unity of production (ex: the machine-related activity cost pool represents a unit-level activity since every prod unit requires machine time |
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Term
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Definition
| activities must be performed for each bast of products rather than each unity |
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Term
| Product-sustaining level costs |
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Definition
| activities that are needed to support an entire product line but are not performed every time a new unit or batch of prod s produced (ex: R&D) |
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Term
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Definition
| activities required in order for the entire prod process to occur. (ex: plant management salaries, plant depr, prop taxes) |
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Term
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Definition
| results from an organization's ownership or use of facilities and its basic organization structure (ex. property taxes, depr on buildings and equip, costs of renting facilities or equip, salaries of mgmt personnel) |
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Term
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Definition
| arises as a result of a mgmt decisions to spend a particular amount of money for some purpose (ex: amounts spent on research and development, advertising and promotion, mgmt development programs, and contributions to charitable organizations |
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Term
| 5 purposes of budgeting system |
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Definition
1) Planning
2) Facilitating Communication and Coordination
3) Allocating Resources
4) Controlling Profit and Operations
5) Evaluating Performance and Providing Incentives |
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Term
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Definition
| devoting management time to investigate significant variances |
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Term
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Definition
Costs that have already been incurred. They do not affect
cost and cannot be changed by any current or future action. They are
irrelevant to decisions |
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Term
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Definition
| Costs that are relevant to present and future expenditures |
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Term
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Definition
The potential benefit given up when the choice of
one action precludes a different action |
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Term
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Definition
| detailed plan for controlling overhead costs that is valid in the firm's relevant range of activity |
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Term
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Definition
| budgets based on a particular planned level of activity |
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Term
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Definition
| results when managers of subunits throughout and org strive to achieve the goals set up by top mgmt |
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Term
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Definition
subunit in an org whose manager is held accountable for specified financial results of the subunit's activites; four common types:
1) Cost Center
2) Revenue Center
3) Profit Center
4) Investment Center |
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Term
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Definition
| held accountable for costs incurred (ex: painting dept in auto manuf plant) |
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Term
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Definition
| manager is held accountable for the revenue attributed to the subunit (ex: sales dept) |
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Term
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Definition
| manager is held accountable for profit (rev - expenses); (ex: company owned restaurant in a fast-food chain) |
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Term
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Definition
| held accountable for the profit and the investment capital used by the subunit to generate its profit (ex: division of a large corporation) |
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Term
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Definition
| costs that are incurred to benefit more than one segment (ex: salary of CEO) |
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Term
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Definition
| assigning costs in cost pool to cost objects |
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Term
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Definition
uses non-financial performance measures of
current activities to drive future financial performance by creating a
balanced perspective on performance measurement. |
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Term
| Four Perspectives of Balanced Scorecard |
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Definition
Financial;
Customer; Internal Operations; and Learning and Growth |
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Term
distinguish between controllable and
uncontrollable costs |
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Definition
a head chef at a restaurant being able
to influence the hours and efficiency of the kitchen staff, but not
being able to change the wage rates. |
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