Term
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Definition
| cost of job determined by actual direct material and labor costs plus overhead applied using an actual overhead rate and an actual allocation base |
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| Method in which the costs to be inventoried include only the variable manufacturing costs. Fixed factory overhead is treated as a period cost-it is deducted along with the selling and administrative expenses in the period incurred. |
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| Throughput costing treats all costs as period expenses except for direct materials. |
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| Super-full absorption costing: includes some mfg. related admin costs—used for tax. |
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Term
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| Gross Margin is the Gross Profit as a percentage of Net Sales. The calculation of the Gross Profit is: Sales minus Cost of Goods Sold. The Cost of Goods Sold consists of the fixed and variable product costs, but it excludes all of the selling and administrative expenses. |
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| Contribution Margin is Net Sales minus the variable product costs and the variable period expenses. The Contribution Margin Ratio is the Contribution Margin as a percentage of Net Sales. |
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Term
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Definition
| accounting system that traces costs to individual units or specific costs, contracts, or batches of goods |
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Term
| what kind of products use job costing? |
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| construction, consulting, hospitals, customized products |
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Term
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Definition
| record of the cost of the job kept in the accounting system |
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| account that records financial transactions for a specific customer, vendor, or job |
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| account in the general ledger that summarizes a set of subsidiary ledger accounts |
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Term
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Definition
Actual costing is the recording of product costs based on the following factors:
Actual cost of materials
Actual cost of labor
Actual overhead costs incurred, allocated using the actual quantity of the allocation base experienced during the reporting period
Thus, the key point in an actual costing system is that it only uses actual costs incurred and allocation bases experienced; it does not incorporate any budgeted amounts or standards. |
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Term
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Definition
| cost of job determined by actual direct material and labor plus overhead applied using a predetermined rate an an actual allocation base |
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