B3 Flashcards
Define a cost Driver
casual factor that increases the cost of a cost objective; often non-financial
How to calc DM for a period?
Beginning DM \+Purchases -return and allowances \+ Freight in/transport in - Ending inventory
Define process costing
method of allocating products and services by averaging the cost over the total units produced.
costs are usually accumulated by department rather than job
What is a limitation of ABC costing?
The expense of obtaining cost data is relatively high
When should multiple or departmental rates be considered preferable to single or plant-wide OH rate?
When various products are manufactured that do not pass through the same depts or use the same mfg techniques
What are the 3 ways Joint costs will be allocated?
- relative unit volume
- Relative sales value at split off
- NRV
In ABC, what should be used to assign a depts MOH costs to products produced in varying lot sizes?
Multiple cause and effect relationships
In relation to costs related Traditional costing, the ABC method results in __
Greater unit costs for low-volume products than is reported by traditional product costing
Define an Engineered Cost
An Engineered cost bears an observable and known relationship to a quantifiable activity base
Which quality control chart is most similar to a histogram?
pareto diagram
What are the elements in a fishbone diagram?
Manpower, machinery, methods, and materials
What are the elements of a Pareto diagram?
display individual and cumulative frequency of quality issues, defect, or problems
What type of organizational segment is most like its own independent business?
Investment center
What are some examples of appraisal costs?
Quality checks
Inspections
Testing
Maintenance of lab
The optimal int rate used in the residual income approach to performance evaluation is best known as
Target ROI set by the companys management
