Chapter 2 Lecture Flashcards
can be conveniently and economically traced (tracked) to a cost object
direct costs
cannot be conveniently or economically traced (tracked) to a cost object. instead of being traced, these costs are allocated to a cost object in a rational and systematic manner
indirect costs
a general term that encompasses both (1) tracing direct costs to a cost object and (2) allocating indirect costs to a cost object
cost assignment
refers to all direct manufacturing costs (materials and labor)
prime cost
refers to direct labor and indirect manufacturing costs
conversion cost
are considered part of indirect overhead costs
overtime premium labor costs
refers to the wages paid for unproductive time caused by lack of orders, machine or computer breakdown, work delays, poor scheduling, and the like
idle time
total dollars- CHANGE in proportion with output (more output = more cost)
cost per unit- UNCHANGED in relation to output
variable or fixed costs
variable costs
total dollars- UNCHANGED in relation to output
variable or fixed costs
fixed costs
a variable, such as the level of activity of volume, that casually affects costs over a given time span
cost driver
the band or range of normal activity level of volume in which there is a specific relationship between the level of activity or volume and the cost in question
relevant range
Accounts payable roll forward
Accounts payable roll forward
___________________
Beginning balance
+ credit purchases
____________________
= Accounts available for payment
- cash payments
____________________
= Ending balance
Accounts receivable rollforward
Accounts receivable roll forward
______________________
Beginning balance
+ credit sales
______________________
= Accounts available for collection
- cash collections
______________________
= Ending balance
Inventory roll forward
Inventory roll forward
______________________
Beginning balance
+ purchases
______________________
= Goods available for sale
- cost of goods sold
______________________
= Ending balance
are all costs capitalized into inventory and thus COGS when the product is sold
includes manufacturing costs
- direct materials
- direct labor
- indirect manufacturing
inventoriable costs
are all costs in the income statement other than cost of goods sold. they are treated as expenses of the accounting period in which they are incurred
period costs
Direct (raw) materials roll forward
Direct (raw) materials roll forward
______________________
Beginning DM inventory
+ direct materials purchased
______________________
= Direct materials available
- direct materials used
______________________
= Ending DM inventory
Work in process roll forward
Work in process roll forward
______________________
Beginning WIP inventory
+ direct labor
+ direct materials used
+ indirects/overhead
______________________
= WIP availabe (total manufactoring costs to account for)
- cost of goods manufactured
______________________
= Ending WIP inventory
direct labor + direct materials used + indirect/overhead = total manufacturing costs incurred (or) for the period
Finished goods roll forward
Finished goods roll forward
_____________________________
Beginning FG inventory
+ cost of goods manufactured
_____________________________
= Finished goods available
- cost of goods sold
_____________________________
= Ending FG inventory
