final Flashcards
direct cost
a cost that can be easily and cost-effectively traced to a specific cost object
Indirect cost
a cost that relates to a cost object but cannot be easily or cost-effectively traced to it
Product costs
include all costs necessary to bring a product to completion
Period costs
include all other costs of operations other than product costs
Variable cost
varies in total but is fixed per unit
Fixed cost
is fixed in total but varies on a per-unit basis
absorption costing
all manufacturing costs(COGS) are expensed only when inventory is sold
variable costing
only variable costs are capitalized as inventory, all fixed manufacturing overhead costs are expensed in the period incurred, making COGS lower
how are journal entries recorded for job order costing?
unit costs are computed by job on the job cost sheet
how are journal entries recorded for process costing?
unit costs are computed by department
journal entry for materials purchased
materials inventory
———accounts payable
journal entry for materials used
WIP inventory
———materials inventory
journal entry for record labor
WIP inventory
———wages payable
journal entry to apply manufacturing overhead
WIP
———overhead
journal entry to record finished goods
finished goods
———WIP
