Chapter 2 Week 2 Flashcards
cost
The measure of resource given up to achieve a particular purpose.
expenses
The consumption of assets for the purpose of generating revenue.
product cost
The costs associated with goods for sale until the time period during which the products are sold, at which time the costs become expense.
aka inventoriable cost
period costs
The costs that are expensed during the time period in which they are incurred.
cost of goods sold
The period of the sale the product costs are recognized as expenses.
What are the 3-types of inventory?
raw-material
work-in-process
finished goods
What are the 4 types of manufacturing?
Job Shop
Batch
Assembly Line
Continuous Flow
What are the 3 types of manufacturing costs?
Direct Material
Direct Labor
Manufacturing Overhead
What are the components of manufacturing overhead?
Indirect Material
Indirect Labor
Other Manufacturing Costs
What are prime costs?
Direct Material + Direct Labor
What are conversion costs?
Direct Labor + Manufacturing Overhead
What are work in process inventory?
Direct material + Direct Labor + Manufacturing Overhead
Explain how the 4 manufacturing processes differ.
Job Shop (low volume, little standardization, custom production)
Batch (low volume, multiple products, built in “batches”)
Assembly Line (higher volume, few major products)
Continous Flow (high volume, standardized commodity products,
