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acct Flashcards

1
Q

financial accounting

A

measure and report info to external parties

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2
Q

managerial accounting

A

measure and report info to internal parties

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3
Q

direct cost

A

expense that can be directly tied to production of good
- easy to trace

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4
Q

indirect cost

A

expense that isnt identified as part of activity but need for operation
- hard to trace

  • ex: rent, utilities, taxes, depreciation, insurance
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5
Q

common cost

A

cost incurred to support number of cost objects but cant be trace

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6
Q

direct materials (manufacturing cost)

A

RM that becomes part of finished goods
- can be trace

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7
Q

direct labor (manufacturing cost)

A

labor cost, wage
- easy to trace

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8
Q

prime cost

A

sum of DM n DL

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9
Q

manufacturing overhead (manufacturing cost)

A

manufacturing cost (indirect cost) - DM & DL
- include raw materials (indirect materials & indirect labor)

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10
Q

conversion cost

A

DL + MOH incurred to change RM into FG

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11
Q

selling cost (nonfracturing cost)

A

all cost incurred to secure customers order & get FG to customers
- ex:
ads, shipping, sale travel, commissions

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12
Q

administrative costs (nonfracturing cost)

A

all cost relate with general management of organization
- ex:
executive compensation, general accounting, secretarial, public relations

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13
Q

product (inventoriable) cost

A

all cost involved in acquiring or making product
- can be inventoried
- aka, COGS

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14
Q

period costs

A

all cost that are not product cost
> selling + administrative cost

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15
Q

variable cost

A

cost varies
- total $ varies
- unit $ remain the same
- ex: materials, labor

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16
Q

activity based

A

measure of whatever causes the incurrence of a variable cost
- ex: DL hours, machine hours, unit produced, unit sold

^make cost varies

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17
Q

fixed cost

A

cost does not change
- total $ constant
- unit $ varies (FC ↓ activity level rise) (FC ↑ activity level fall)

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18
Q

committed fixed cost

A

fixed cost that can’t easily be changed or eliminated w out big changes
- ex: equipment, insurance, land

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19
Q

discretionary fixed cost

A

fixed cost that can be change by annual decisions
- ex: ads, research, public relation

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20
Q

relevant range

A

range of activity within which the assumption that cost behavior is strictly linear is reasonably valid

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21
Q

mixed cost

A

contain both variable & fixed cost

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22
Q

differential cost

A

future cost that differs between 2 alternative
- always relevant cost

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23
Q

incremental cost

A

total cost incurred due to +1 unit

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24
Q

differential revenue

A

future revenue that differs between 2 alternative

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25
Q

sunk cost

A

cost that can taken back, so ignore it

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26
Q

opportunity cost

A

foregone benefits

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27
Q

traditional format income statement

A

organized into 2 categories
1. COGS
2. selling & administrative expense

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28
Q

contribution format income statement

A

organized cost by behaviors
1. fixed cost
2. variable cost

  • external reporting purposes used for internal planning n decisions
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29
Q

contribution margin

A

amount remaining from sale rev after all variable exp. have been deducted
- amount contributes toward paying FC n profit

  • sale rev - VC
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30
Q

absorption costing

A

cost method that includes all manufacturing cost in unit product costs

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31
Q

job order costing

A

system used in situation where many different products, jobs, or services are produced each period

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32
Q

bill of materials

A

document that lists quality of each type of DM needed to complete a unit of product

  • when agreement is reached, production order is issued
33
Q

materials requisition form

A

doc that specifies type n quantities of materials to be drawn from storeroom & identifies the job that will be charged for cost of those materials

34
Q

job cost sheet

A

form that records the DM, DL, MOH charged to a job
- record when materials are issued to the job

35
Q

time tickets

A

hr-by-hr summary of the employees activities throughout the day
- NOT posted in job cost sheet

36
Q

bar code

A

used to automatically record n post DL costs to jobs

37
Q

allocation

A

used to assign OHC to product under these circumstances

38
Q

allocation base

A

measure activity that is used to assign costs to cost objects
- DLHR, machine hr, DL cost, units of product

39
Q

predetermined overhead rate

A

rate used to charge MOH to jobs that is established in advance

40
Q

overhead application

A

process of assigning OHC to specific jobs

41
Q

normal cost system

A

cost system used to apply overhead

42
Q

cost-plus pricing

A

approach where managers establish a markup % that is assumed to be generate enough rec to cover all job cost

43
Q

cost driver

A

factor that causes OHC
- ex: machine hrs, computer time, bed occupied, flight-hrs
- improve job accuracy

44
Q

plantwide overhead rate

A

single POR, allocate MOHC to jobs based on usage of DLHR

45
Q

multiple POR

A

cost system to multiple OHC & different POR

46
Q

job cost sheet

A

accumulates total DM, DL, MOHC

47
Q

subsidiary ledger

A

all company job cost sheet are viewed collectively

48
Q

cost of goods manufactured

A

manufacturing cost associated w units of product that were finish during the period

  • amount transferred from WIP to FG
49
Q

underapplied overhead

A

OHC actually incurred > OHC applied

50
Q

overapplied overhead

A

OHC actually incurred < OHC applied

51
Q

departmental overhead rates

A

different POR in each production department

52
Q

activity based costing

A

event that causes the consumption of OH resources

53
Q

activity cost pool

A

“bucket” in which costs related to a particular activity measure are accumulated

54
Q

activity measure

A

Measure of whatever causes the costs in an activity cost pool

ex: “admitting patients” causes “# of patients admitted”

55
Q

activity rate (POR)

A

OH rate in activity-based costing

56
Q

unit-level activities (hierarchy of activity)

A

activities arise as a result of total volume of goods that are produced and are performed each time unit is produced

57
Q

batch-level
(hierarchy of activity)

A

activity that are performed each time a batch of good is handled or processed

58
Q

product-level activities

A

relate to specific product that must be carried out

59
Q

facility-level activity

A

activities that are carried out (batch, # of unit.. blah does not matter)

60
Q

product cost

A

DM, DL, OH

61
Q

activity-based management

A

focus on managing activities as a way of eliminating waste & reducing delays n defectsb

62
Q

benchmarking

A

used to identify activities with greatest room for improvement

63
Q

process costing

A

used for industry to convert RM to homogeneous products

64
Q

processing department

A

an organizational unit where work is performed on a product & where materials, labors, or overhead costs are added to the product

65
Q

weighted-average method

A

combine costs n outputs from current & prior period

66
Q

FIFO method

A

combine costs & output from current period

67
Q

operating costing

A

hybrid costing system used when products have some common n individual characteristic

68
Q

cost-volume-profit analysis (CVP)

A

help manger make important decisions such as: what product / price / market strategy / cost structure to maintain

69
Q

contribution margin (CM)

A

amount remaining from sales revenue after variable expense is deducted

70
Q

CM loss

A

CM < FC

71
Q

CM profit

A

CM > FC

72
Q

break-even point

A

level of sales which profit = 0

73
Q

CVP graph

A

show relationship between 1) rev, costs, n profits 2) sales volume

74
Q

incremental analysis

A

analytical approach that focuses only on those costs n revenue that change as a result of a decision

75
Q

margin of safety

A

excess of budgeted or actual dollar sales over the break-even dollar sales

76
Q

cost structure

A

relative proportion of FC & VC in an organization

77
Q

operating leverage

A

measure of how sensitive net operating income is to a given % change in dollar sales

78
Q

degree of operating leverage

A

measure how % change in sales will affect profits

79
Q
A

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