Chapter 2/3 Flashcards
Value Chain
R/D, Design, Production/Purchases, Marketing, Distribution, Customer services
Cost Object
Anything that you want to know the cost of
Period cost
Every other section of Value chain
Product cost
Includes only the Product and purchases of the value chain
Product costs for Manufacturing
DM, DL, and MOH
Prime cost
DM+DL
Converesion cost
DL + MOH
Where do DM, DL, MOH go on the income statements?
Labeled as C.O.G.S. on the balance sheet’s inventory
Where do period costs go?
Straight into the income statement
Income statement for merch/manu comp
Rev-C.O.G.S.= Gross Profit
Gross Pofit- Operating Ex= Operating Income
Service comp income statement
Rev- Operating Expensive= Operating income
What would the operating expense include?
Period Costs
Flow of inventory Merch company
Beg Inv + Purchases - C.O.G.S. = Ending Inventory
Raw Material Formula
Beg RM+ purchases -DM used = Ending RM
WIP formula
Beg WIP + DM/DL/MOH- C.O.G.M.= Ending WIP
Finished Good
Beg FG + C.O.G.M. - C.O.G.S. = Ending
Gross profit formula
REV-COGS=GP
Fixed Cost in Total
Remains constant
Variable Cost in Total
Changes directly
Fixed Cost per Unit
Changes indirectly
Variable Cost per Unit
Remains constant
Stock inventory
Stock of what a company sells on a regular basis
Production schedule
Indicates the quantity and types of inventory
Bill of materials
Losts all of the raw material needed to manufacture the job
Raw material record
Detailed information about each stock item
Purchase order
Sent to suppliers for any needed part
Recieving report
Where all incoming raw materials are recorded
Job cost record
Keeps track of all the direct materials and direct labor used on the job
Material requisition
Document itemizing the materials currently needed from the store room
Labor time records
Records the time spent by each employee on each job they’ve worked on
Process costing
Identical product ls made in large batches in an uniform process
Job costing
Unique products, smaller batches, differing procedures
Steps for MOH job costing
- Estimate total MOH
- A.b.
- Divide step 1 by 2
- Predetimined MOH X a.b. rate
Formula to find If it is under or over allocated
(Est. MOH/ Est. A.B.) -Actual MOH
