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241 Final
Managerial
38
Accounting
Undergraduate 2
04/26/2011

Additional Accounting Flashcards

 


 

Cards

Term
Product Costs (aka Inventoriable Costs)
Definition
Cost assigned to goods that were either purchased or manufactured for resale; are inventoried
Term
Period Costs
Definition
all costs that are not product costs (ex. R&D, admin, and selling) and are expensed
Term
Prime Costs=
Definition
Direct Material + Direct Labor
Term
Conversion Costs
Definition
Direct labor and overhead
Term
Schedule of Cost of Goods Manufactured
Definition
Direct Material [Beg Inv + Purchases - End Inv] + Direct Labor + Manufacturing Overhead [ind material + ind labor + depr + utilities + insurance] + Beg WIP - End WIP
Term
Schedule of Cost of Goods Sold
Definition
Beg FG + CGM - End FG
Term
Job-Order Costing
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
Term
Process-Costing
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
Term
Predetermined Overhead Rate=
Definition
(Budg Manuf Ovhd Cost)/(Budg Amt of Cost Driver)
Term
Apply Manuf Ovh Rate
Definition
Quantity Used * POHR
Debit WIP and Credit Manuf Ovh
Term
Overapplied Overhead
Definition
When Actual Manuf Ovh < Applied Manuf Ovh
Term
Underapplied Overhead
Definition
When Actual Manuf Ovh > Applied Manuf Ovh
Term
Difference Bettwen ABC and Traditional
Definition
ABC has different cost pools for each activity; traditional just uses 1
Term
Two Stages of ABC
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
Term
Unit Level Costs
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
Term
Batch Level Costs
Definition
activities must be performed for each bast of products rather than each unity
Term
Product-sustaining level costs
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)
Term
Facility Level Costs
Definition
activities required in order for the entire prod process to occur. (ex: plant management salaries, plant depr, prop taxes)
Term
Committed Cost
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)
Term
Discretionary Costs
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
Term
5 purposes of budgeting system
Definition
1) Planning
2) Facilitating Communication and Coordination
3) Allocating Resources
4) Controlling Profit and Operations
5) Evaluating Performance and Providing Incentives
Term
Management by Exception
Definition
devoting management time to investigate significant variances
Term
Sunk Costs
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
Term
Relevant Costs
Definition
Costs that are relevant to present and future expenditures
Term
Opportunity Costs
Definition
The potential benefit given up when the choice of
one action precludes a different action
Term
flexible overhead budget
Definition
detailed plan for controlling overhead costs that is valid in the firm's relevant range of activity
Term
static budget
Definition
budgets based on a particular planned level of activity
Term
Goal Congruence
Definition
results when managers of subunits throughout and org strive to achieve the goals set up by top mgmt
Term
Responsibility Center
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
Term
Cost Center
Definition
held accountable for costs incurred (ex: painting dept in auto manuf plant)
Term
Revenue Center
Definition
manager is held accountable for the revenue attributed to the subunit (ex: sales dept)
Term
Profit Center
Definition
manager is held accountable for profit (rev - expenses); (ex: company owned restaurant in a fast-food chain)
Term
Investment Center
Definition
held accountable for the profit and the investment capital used by the subunit to generate its profit (ex: division of a large corporation)
Term
Common Costs
Definition
costs that are incurred to benefit more than one segment (ex: salary of CEO)
Term
Cost Allocation
Definition
assigning costs in cost pool to cost objects
Term
Balanced Scorecard
Definition
uses non-financial performance measures of
current activities to drive future financial performance by creating a
balanced perspective on performance measurement.
Term
Four Perspectives of Balanced Scorecard
Definition
Financial;
Customer; Internal Operations; and Learning and Growth
Term
distinguish between controllable and
uncontrollable costs
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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