Exam 3 Flashcards
A method of allocating overhead based on each product’s use of activities in making the product.
Activity-based costing (ABC)
A performance-measurement approach that uses both financial and nonfinancial measures, tied to company objectives, to evaluate a company’s operations in an integrated fashion.
Balanced scorecard
The group of officials elected by the stockholders of a corporation to formulate operating policies and select officers who will manage the company.
Board of directors
Corporte officer who has oerall respnsibility for managing the business and delegates responsibilities to other corporate officers.
Chief executive officer (CEO)
Corporate officer who is responsible for all of the accounting and finance issues of the company.
Chief financial officer (CFO)
Financial officer responsible for a company’s accounting records, system of internal control, and preparation of financial statements, tax returns, and internal reports.
Controller
The efforts of a company to employt sustainable business practices with regard to its employees, society, and the environment.
Corporate social responsibility
Total cost of work in process less the cost of the ending work in process inventory. Cost of all the items completed during the period.
Cost of goods manufactured
The use of techniques, which often combine software and statistics, to analyze data to make informed decisions.
Data analytics
The work of factory employees that can be physically and directly associated with converting raw materials into finished goods.
Direct labor
Software the provides a comprehensive, centralized, integrted source of information used to manage all major business processes.
Enterprise resource planning (ERP) system
Work of factory employee that has no physical association with the finished product or for which it is impractical to trace the costs to the goods produced.
Indirect labor
Raw materials that do not physically become part of the finished product or that ar impractical to trace to the finished product because their physical association with the finished product is too small.
Indirect materials
Inventory system in which goods are manufactured or purchased just in time for sale.
Just-in-time (JIT) inventory
Jobs that are directly involved in a company’s primary revenue-generating operating activities.
Line positions.
A field of accounting that provides economic and financial information for managers and other internl users.
Managerial accounting
Manufacturing costs that are indirectly associated with the manufacture of the finished product.
Manufacturing overhead
Costs that are matched with the revenue of a specific time and charged to expense as incurred.
Period costs
Costs that are a necessary and integral part of producing the finished product. All manufacturing costs are cassified as product costs and are included in inventory.
Product costs
Law passed by Congress intended to reduce unethical corporate behavior.
Sarbanes-Oxley Act (SOX)
Jobs that support the efforts of line employees.
Staff positions
A specific approach used to identify and manage constraints in order to achieve the company’s goals.
Theory of constraints
Cost of the beginning work in process plus total manufacturing costs for the current period.
Total cost of work in process
The sum of direct materials, direct labor, and manufacturing overhead incurred in the current period.
Total manufacturing costs
Systems implemented to reduce defects in finished products with the goal of achieving zero defects.
Total quality management (TQM)
Financial officer responsible for custody of a company’s funds and for maintaining its cash position.
Treasurer
The evaluation of a company’s social responsibility performance with regard to people, planet, and profit.
Triple bottom line
All business processes associated with providing a product or performing a service.
Value chain
Partially completed manufactured units.
Work in process inventory
An area of accounting that focuses on measuring, recording, and reporting product and service costs.
Cost accounting
Manufacturing and service cost accounts that are fully integrated into the general ledger of a company.
Cost accounting system
A form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job.
Job cost sheet
A cost accounting system in which costs are assigned to each job or batch.
Job order cost system
A document authorizing the issuance of raw materials from the storeroom to production.
Materials requisition slip
A situation in which overhead applied to work in process is greaer than the actual overhead costs incurred.
Overapplied overhead
A rate based on the relationship between estimated annual overhead costs and estimated annual operating activity, expressed in terms of a common activity base.
Predetermined overhead rate
A cost accounting system used when a company manufactures a large volume of similar products.
Process cost system
A document that indicates the employee name, the hours worked, the account and job to be charged, and the total labor cost.
Time ticket
A situation in which overhead applied to work in process is less than the actual overhead costs incurred.
Underapplied overhead
The sum of direct labor costs and manufacturing overhead costs.
Conversion costs
A schedule that shows that the total costs accounted for equal the total costs to be accounted for.
Cost reconciliation schedule
A measure of the work done during the period, expressed in fully completed units.
Equivalent units of production
A combination of a process cost and a job order cost system in which products are manufactured primarily by standardized methods, with some customization.
Operations costing
Actual units to be accounted for during a period, irrespective of their state of completion.
Physical units
An accounting system used to assign costs to similar products that are mass-produced in a continuous fashion.
Process cost system
An internal report for management that shows both production quantity and cost data for a production department using process costing.
Production cost report
The sum of the units completed and transferred out during the period plus the units in process at the end of the period.
Total units accounted for
The sum of the units started into production during the period plus the units in process at the beginning of the period.
Total units to be accounted for
Costs expressed in terms of equivalent units of production.
Unit production costs
Method of computing equivalent units of production that considers the degree of completion (weighting) of the units completed and transferred out and the ending work in process.
Weighted-average method
