Term
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Definition
indirect materials and labor;
man. costs which cannot be conveniently traced to specific units produced |
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Term
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Definition
| direct materials and direct labor |
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Term
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Definition
| selling and admin expenses |
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Term
| basic equation for inventory accounts |
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Definition
| (beg. balance) + (additions to inv) - (withdrawals from inv) = end balance |
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Term
| raw materials used in production |
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Definition
| (beg raw mat. inv.) + purchases - (end raw mat. inv.) |
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Term
| cost of goods manufactured |
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Definition
| (direct materials) + (direct labor) + (manufacturing OH) + (beg. WIP inv.) - (end. WIP inv.) |
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Term
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Definition
| (beg. finished goods inv.) + (cost of goods manufactured) - (end. finished goods inv.) |
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Term
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Definition
(sales revenue) - COGS = (gross margin)->
(gross margin) - (selling and admin exp.) |
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Term
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Definition
| many units of single product produced continuously, homogeneous units, costs allocated to departments, assign same average cost per unit |
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Term
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Definition
| many different products manufactured to order, allocate costs to specific jobs using a predetermined OH rate |
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Term
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Definition
| estimated total manufacturing cost/estimated total units in allocation base |
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Term
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Definition
| [(cost of beg WIP inv)+ (costs added during period)]/(equivalent units of production) |
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Term
| equivalent units (weighted avg method) |
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Definition
| (number of units transferred out) + (equivalent units in end. inv.) |
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Term
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Definition
-variable cost per unit of activity =
(high activity cost - low cost)/
(high activity - low activity)
-total fixed cost= total cost- total var. costs |
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Term
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Definition
| sales - variable expenses |
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Term
| contribution margin ratio (sales dollars and unit) |
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Definition
CM ratio ($)=(total contribution margin)/(total sales)
CM ratio(unit)=(unit CM)/(unit selling price) |
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Term
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Definition
BE(units)=(Fixed expenses)/(CM per unit)
BE($)=(Fixed expenses)/(CM ratio) |
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Term
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Definition
unit sales to attain desired profits=
[(fixed exp.)+(target profit)]/(CM per unit) |
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Term
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Definition
total sales - BE sales
MOS(%)=MOS($)/actual sales revenue
MOS(units)=MOS($)/Selling price per unit |
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Term
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Definition
degree of operating leverage =
CM /(net op. income) |
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Term
| required units of production |
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Definition
| (sales in units)+ (desired units in end. inv) - (units in beg inv.) |
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Term
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Definition
AQ*AP AQ*SP SQ*SP
-------- --------
price var. quantity var. |
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Term
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Definition
AHrs*ARate AH*SR SH*SR
-------- --------
labor rate var. labor efficiency var. |
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Term
| variable manufacturing overhead variance model |
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Definition
AHrs*ARate AH*SR SH*SR
-------- --------
spending var. efficiency var. |
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Term
| return on investment (ROI) |
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Definition
margin x turnover =
(net op. income) / (avg. op. assets) |
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Term
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Definition
| net op. income - [(avg. op. assets) x (min. rate of return)] |
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Term
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Definition
1. find present value of cash inflows
2. find present value of cash outflows
3. (present value of cash inflows)- (present value of cash outflows) |
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Term
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Definition
| (net present value of project)/(investment required) |
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Term
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Definition
| (investment required) / (net annual cash inflow) |
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Term
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Definition
| (annual incremental net op. income)/ (initial investment) |
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Term
| factor of the internal rate of return |
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Definition
| (investment required)/(net annual cash inflow) |
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