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Acct 202 > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

Opportunity costs

A

?

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2
Q

Differential costs

A

?

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3
Q

Sunk costs

A

make no difference in decision making

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4
Q

fixed costs expenses examples

A

google it

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5
Q

variable cost expenses examples

A

google it

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6
Q

direct cost

A

can be easily traced

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7
Q

indirect cost

A

cannot be easily traced

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8
Q

manufacturing costs

A

direct materials, direc t labor and manufacuring overhead, and
wages

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9
Q

manufacturing overhead

A

indirect labor, repairs, property taxes, depreciation, insureance, heat and light . costs associated with operating the factory . also called factory burden

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10
Q

non manufacturing costs

A

salaries, administrative costs and selling costs

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11
Q

product costs

A

inventroiable as in if you count them as inventory

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12
Q

period costs

A

if you count them as expensed and not inventory

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13
Q

Variable costs

A

proportional to activity

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14
Q

what do you use to predict cost behavior in repsonse to changes in activity?

A

variable cost, fixed cost, mixed cost

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15
Q

fixed cost

A

constant in total. you can have

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16
Q

mixed cost

A

has variable and fixed elements

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17
Q

making decisions, what do you look at?

A

diffierential cost (differs between alternatives), sunk cost (should be ignored, already paid), and opportunity costs(foregone benefit )

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18
Q

what costs do you use to prepare financial statements?

A

product costs (inventory) and period costs (expenses)

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19
Q

accounting or assigning costs in manufacturing companies

A

manufacturing costs and non manufacturing costs.

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20
Q

assigning costs to cost objects(this is whenever cost data is wanted)

A

direct cost and indirect cost

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21
Q

product cost formula

A

direct materials + Direct Labor + Manufacturing overhead

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22
Q

Period Cost Formula

A

Selling expenses + Administrative expenses

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23
Q

Conversion cost

A

Direct labor + Manufacturing overhead

24
Q

Prime cost

A

Direct materials + direct labor

25
Q

cost behavior

A

how the cost will change due to changes in level of activity

26
Q

cost structure

A

when comparing variable fixed or mixed costs you wil see it on a chart and you will see how your costs are structured. Do you want fixed costs being the hhighest cost or do you want mixed costs to be lower proportioned to your other costs? things like that

27
Q

activity base

A

it is the measure by which it induces a variable costs

28
Q

common cost

A

type of indirect cost incurred to benefit more than on e cost object is a

29
Q

direct materials

A

also may be called raw materials but not always. they become important component of the finished producta nd their cost can be easily and ocnveniently traced to the finished product are direct materials

30
Q

how to calculate variable and fixed costs per hour when you add more hours.

A

you divide the fixed cost by the new hours and get a new number. you divide the variable cost by the old hours and get a number that you add the new fixed costs to and get the variable and fixed cost her hour. . since variable costs are a constant number that that multiplies at a fixed number for each hour. fixed costs are an overall cost. when you divide out the fixed cost it can have different per unit costs when doing different amounts of activities but the overall total number will remain fixed.

31
Q

how to find the average fixed cost per hour

A

divide the total fixed costs by the total number of hours

32
Q

contribution margin

A

subtract all variable costs from revenues

33
Q

variable cost formula

A

change in cost divided by change in activity (usually measured in hours)

34
Q

mixed cost equation

A

y=a +bX

y= total mixed cost
a = total fixed cost (vertical intercept)
b= the variable cost per unit of activity (hours o?)
X = level of activity ( like total amount of hours)
35
Q

selling costs

A

advertising, sales commissions, sales salaries

36
Q

dress manufacture considers relatively inexpensive items like thread to be..

A

manufacturing overhead and indirect materias because it is not worth the time and cost to directly trace them to products

37
Q

bill of materials

A

deoc that lists type and quantity of each type of direxct material needed to complete a unit of product. used in the job-order costing

38
Q

materials requisition form

A

doc that specifies the type and quantity of materials to be drawn from eh storeroom and identifies the job that will be chargd for the cost of materials . used to control the flow of materials into production and also for making entries in the accoutning records.

39
Q

job cost sheet

A

records the materials labor and manufacturing overhead costs charged to that job

40
Q

indirect labor

A

maintenance, supervision and cleanup

41
Q

computing predetermined overhead rates can be hard because…

A

overhead is an indirect cost because it is hard to trace it to a particular product or job
it consists of mnay different types of costs.

COMPUTED BEFORE THE PERIOD BEGINS

42
Q

are manufacturing overhead costs relatively constant? or vary significantly from one period to the next?

A

they ten to remain relatively constand due to the presence of fixed costs. Units produced fluctuate which casues the average cost per unit to vary

43
Q

formula for estimating total manufacturing overhead cost for the coming period

A

y= a + bX

y= estimated total manufacturing overhead cost.
a- the estimated total fixed manufacturing overhead cost
b- the estimated variable manufacturing cost per unit of the allocation base.(like wage)
X- the estimated total amount of the allocation base(like direct labor-hours)

44
Q

overhead application

A

Predetermined overhead rate x amount of allocation base INCURRED by job. (not estimate)

determines the ammount of overhead cost to apply to a particular job. always use the estimated #’s not the actual

predetermined overhead % x ammount of the allocation base inccurred by the job(like hours used)

45
Q

Predetermined overhead rate formulat

A

%%
estmiated manufacturing overhead/ estimated allocation base (or if they are the same then it is estimated direct labor costs)
or…
estimated total manufacturing over head cost(y=a+ bX)
divided by
estimated total amount of the allocation base(like direct labor hours worked)

46
Q

direct costs are ___ while overhead costs are____

A

direct costs are traced to products while overhead costs are applied

47
Q

cost driver

A

a factor that causes overhead costs to occur

48
Q

total cost of a job is calculated by adding the

A

total of direct labor cost + direct materials cost + APPLIED manufacturing overhead cost.

49
Q

calculate unit product cost using the job cost sheet…

A

divide the total job cost by the number of units produced.

50
Q

raw materials

A

when materials are purchased they are recorded int eh Raw materials inventory account. Raw materials traced to specific jobs are transferred to work in process as direct materials

51
Q

work in process inventory

A

units of product that are only paritally complete

52
Q

the schedule of cost of goods manufactured

A

raw materials used in production= beginning raw materials inventory + purchases of raw materials - ending raw materials inventory

53
Q

total manufacturing costs

A

= direct materials + direct labor + manufacturing overhead APPLIED to work in process

54
Q

cost of goods manufactured

A

total manufacturing costs + beginning work in process inventory - ending work in process inventory

55
Q

unadjusted cost of goods sold

A

beginning finished goods inventory + costs of goods manufactured - ending finished goods inventory

56
Q

the schedule of cost of goods sold

A

summarizes costs that remain in the Finished goods inventory and that have been transferred to Cost of goods sold

Acct 202 (4 decks)

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