B3-M1 Flashcards
1
Q
Product costing
A
- All costs related to manufacture the product
- direct materials, direct labor and manufacturing overhead
2
Q
Value adding costs
A
Increase the worth of the product to customers
3
Q
Direct costs
A
- easily traced to production of product
- raw materials and labor
4
Q
Prime cost=
A
Direct labor + Direct material
5
Q
Conversion cost=
A
Direct labor + Manufacturing overhead
6
Q
Direct materials=
A
Beginning balance direct materials \+Purchases \+Transportation in -Purchase returns and allowances -Materials used (DIRECT MATERIALS) =Ending balance
7
Q
Cost driver
A
- causal factor that increases the cost of a cost objective
- ACTIVITIES that cause the cost to increase as the activity increases
8
Q
Inventoriable Costs
A
-Assets until sold, then become “Cost of goods sold”
9
Q
Variable cost
A
-fixed per unit, total varies
10
Q
Cost allocation
A
distribution of overhead costs
11
Q
Semivariable costs
A
-Characteristics of both fixed and variable costs
Ex. Utility costs
12
Q
Overhead application
A
Overhead rate= total budgeted overhead costs/ cost drive
Applied overhead= Actual cost drive* overhead rate
13
Q
Relavant range
A
- Range over which cost relationships are valid
- range of activity in which relationships of fixed and variable costs are meaningful
- total fixed costs and variable cost per unit will not change
