Chapter 4 Flashcards
What are three lean management systems companies use
- Activity-based management systems
- Just-in-time management systems
- Quality management systems
Estimated overhead cost per unit of the allocation base
Predetermined overhead allocation = total estimated overhead cost/total estimated quantity of the overhead allocation
Anything for which managers want a seperate cost
cost objects
A component of a lean management system that focuses on the primary activities the business performs, determines cost, uses info to make decisions
Activity based management system
a task, operation, or procedure that causes a cost to be incurred
activity
Difference between product cost and period costs.
Product cost are related to the production process, and period cost are SG&A
Evaluating activities to reduce costs while still meeting customer needs
Value engineering
The amount customers are willing to pay for a product or service
target price
The price to produce the product or services
full product cost
The maximum cost to develop, produce, and deliver the product or service and earn the desired net profit.
target cost
A system where production is scheduled after customer orders are made and product completion is when the customer needs the product
Just in time management system
A costing system that starts with output that has been completed and then assigns manufacturing costs to units sold and to inventories.
Just in time costing
A combined account for raw materials and work in process
raw and in process inventory
An account that combines direct labor and manufacturing overhead
conversion cost account
Systems that help manager improve the business performance by providing quality products and services
Quality management system
