Lecture 3 Flashcards

1
Q

What does cost assigning encompass?

A

Cost tracing for direct costs to a cost object

Cost allocation for indirect costs to a cost object

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2
Q

Factors affecting direct/indirect cost classification?

A

Materiality of the cost in question

Availability of information-gathering technology

Design of operations

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3
Q

Job costing system?

A

Distinct unit of a product or service

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4
Q

Process-costing system?

A

Masses of identical or similar units of a product or service

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5
Q

Job costing examples in the service sector?

A

Accounting firm audits

Advertising agency campaign

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6
Q

Job costing examples in the merchandising company sector?

A

Sending a catalogue to a mailing list

Special promotion of a new store product

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7
Q

Job costing examples for a manufacturing sector company?

A

Aircraft construction

House construction

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8
Q

Process costing examples for service sector?

A

Deposit processing

Postal delivery

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9
Q

Process costing for merchandising sector?

A

Grain dealing

Processing new magazine subscriptions

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10
Q

Process costing for manufacturing companies?

A

Oil refining

Beverages production

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11
Q

cost object = ?

A

anything for which a separate measurement of costs is desired

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12
Q

direct costs = ?

A

traceable costs to a particular cost object

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13
Q

indirect costs = ?

A

costs of a cost object that aren’t traceable

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14
Q

cost pool = ?

A

a grouping of individual cost items

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15
Q

what are the two types of costing?

A

job costing
process costing

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16
Q

job costing means…

A

to cost cost objects 1 by 1

usually done for personalised/custom-made goods/services

17
Q

process costing means…

A

to cost cost objects at mass in batches

usually done for homogenous goods in abundance

18
Q

first step of job costing?

A

identify the job that is the cost object

19
Q

step 2 of job costing?

A

identify the direct costs for the job

20
Q

step 3 of job costing?

A

identify the indirect cost pool associated with the job

21
Q

step 4 of job costing?

A

select cost allocation base for indirect costs

22
Q

step 5 of job costing?

A

develop rate per unit for indiret costs

23
Q

step 6 of job costing?

A

assign the costs to the cost object

24
Q

two types of job costing?

A

actual costing
normal costing

25
normal costing?
provides managers with timely information preferable in industries where production takes longer than the financial year normal costing requires end of period adjustments for over/under allocated indirect costs
26
direct materials stock = ?
stock that will be used in the manufacturing process (e.g., computer chip components needed for mobile phones)
27
work in process stock = ?
goods are partially worked on but not yet completed AKA goods in progress
28
finished goods stock = ?
goods completed but not yet sold
29
two types of costs?
capitalised as assets (B/S) expenses as incurred (P/L)
30