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takes raw materials and produces new products |
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sell products someone else has manufactured |
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Do Not sell a tangible product as their primary business |
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focused on eliminating waste associated with holding more inventory than required, making unnesecary product, shipping product further than neccesary, and avoiding downtime |
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materials are purchased and products are made JIT to meet customer demand. The process beings with a customer order. Aim to keep inventories at very low levels. |
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costs that are directly attached to the finished product and can be conveiently traced to that product |
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attached to the product but cannot be conveniently traced to each separate product |
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Manufacturing costs (product Costs) |
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those incurred in the manufacture of a product. Usually consist of direct materials, direct labor, and manufacturing overhead. |
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materials that can be directly traced to a particular product and become an integral part of the product. |
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labor cost of all production employees who work directly on the product |
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indirect materials and indirect labor |
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Depreciation of factory machinery |
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Depreciation of vehicles used by sales staff |
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Lease expense on factory equipment |
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Lease expense on office computer |
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Lubricants used for maintenance of factory machineray |
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utilities used in the factory building |
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Utilities used in the administrative headquarters |
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product costing using hte actual overhead costs occured |
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estimated or predetermined overhead rates are used to apply overhead to the Work in Process account |
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how costs react to changes in production volume or other levels of activity |
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costs that remain the same in total when production volume increases or decreases but vary per unit |
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the normal range of production that can be expected for a particular product and company. |
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costs that vary with activity in steps and may look like and be treated as either variable costs or fixed cost. |
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costs that include both a fixed and a variable component, making it difficult to predict the behavior of the cost unless it is first separated into its fixed and variable components. |
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a costing system that accumulates, tracks, and assigns costs for each job produced by a company. |
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a costing system that accumulates and tracks costs for each process performed and then assigns those costs equally to each unit produced. |
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a hybrid of job and process costing; used by companies that make products in batches |
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spoilage resulting from the regular operations of the production process |
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spoilage resulting from unusual circumstances, including improper handling, poorly trained employees, faulty equipment, etc. |
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payroll costs in addition to the basic hourly wage |
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worker time that is not used in the production of the finished product |
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the process of finding a logical method of assigning overhead costs to the products or services a company produces or provides. |
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groups of overhead costs that are similar; used to simplify the task of assigning costs to products using ABC costing. |
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costing using an estimate of overhead and predetermined overhead rates instead of the actual amount of overhead. |
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the amount of applied overhead in excess of actual units. |
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the numer of finsiehd units that can be made from the materials, labor, and overhead included in partially completed units. |
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