M1 Cost Accounting: Part 1 Flashcards
Utility cost are considered what type of costs?
Semivariable (share characteristics of fixed and variable costs)
A causal factor that increases the total cost of a cost objective
Cost driver
Activities that cause costs to increase as the activity increases
Cost driver (NON FINANCIAL)
-DL $
-DL hrs
-machine hrs
cost that varies in total but is fixed per unit
Variable cost
could be used when the customer furnishes the material used in manufacturing a product
Conversion cost
If BOY and EOY direct material numbers are given, how do you find the DM amount?
SQUEEZE similar to COGS
BOY/month + purchases + transportation in - returns and allowances
Product costs defined and components
All costs related to the manufacturing of the product (inventorial - considered assets before product is sold)
Components are DM DL and manufacturing overhead applied
Period costs defined and components
expensed in the period in which they are incurred and are NOT inventorial (income statement not capitalized)
Components are SG&A and managing ops of the firm
wages for factor employees - period or product cost?
PRODUCT
Manufacturing overhead - period or product cost?
PRODUCT
What is scrap materials considered? period, product, direct, etc.
NORMAL scrap is considered a direct raw material so product cost
ABNORMAL scrap is a period cost so on IS
cost that changes proportionately with the cost driver, change in total but remain constant per unit
Variable costs
as volume increases, total cost increases
cost that does not change when the cost driver changes, amount varies per unit
Fixed costs
As volume increases, total cost stays the same
What type of cost is manufacturing overhead (fixed or variable)?
SEMIVARIABLE
*has fixed base but variable properties
range for which assumptions of the cost driver are valid
Relevant range (linear)
