Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Strategic Cost Management > Managerial Accounting and Cost Concepts > Flashcards

Managerial Accounting and Cost Concepts Flashcards

1
Q

What are the classifications of manufacturing costs?

A
  1. Direct Materials
  2. Direct Labor
  3. Factory Overhead
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Define Direct Materials

A

Raw materials that become an integral part of the product and that can be conveniently traced directly to it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Define Direct Labor

A

Those labor costs that can be easily traced to individual units of product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Define Manufacturing Overhead

A

Manufacturing costs that cannot be easily traced directly to specific units produced (Ex. Indirect Materials or Labor)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are the Non-Manufacturing Costs

A
  1. Selling Costs
  2. Administrative Costs
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Define Selling Costs

A

Costs necessary to secure the order and deliver the product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Define Administrative Costs

A

All executive, organizational, and clerical costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Define Product Costs

A

Product Costs include direct materials, direct labor, and manufacturing overhead

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Define Period Costs

A

Period Costs include all selling costs and administrative costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Are product costs inventoriable?

A

Yes, since they go through Inventory first (Balance Sheet), then goes to the Cost of Goods Sold (Income Statement)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Are period costs inventoriable?

A

No, they go straight directly to expenses (Income Statement)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the formula for prime cost?

A

Direct Material + Direct Labor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is the formula for conversion cost?

A

Direct Labor + Manufacturing Overhead

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the Cost Classifications for Predicting Cost Behavior?

A
  1. Variable Cost
  2. Fixed Cost
  3. Mixed Cost
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is a total variable cost?

A

Total variable cost increase and decrease in proportion to changes in the activity level

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is variable cost per unit?

A

Variable cost per unit remains constant

17
Q

What is total fixed cost?

A

Total fixed cost is not affected by changes in the activity level within the relevant range

18
Q

What is fixed cost per unit?

A

Fixed cost per unit decreases as the activity level rises and increases as the activity level falls

19
Q

What is the format for a traditional income statement?

A

Sales - COGS = Gross Margin - Selling and Admin Exp = Net Operating Income

20
Q

What is the format for a contribution format income statement?

A

Sales - Variable Expense = Contribution Margin - Fixed Expense = Net Operating Income

21
Q

What is a differential cost and revenue

A

Costs and revenue that differ among alternatives

22
Q

What is a opportunity costs?

A

The potential benefit that is given up when one alternative is selected over another

23
Q

What is a sunk cost?

A

Sunk costs have already been incurred and cannot be changed now or in the future. These costs should be ignored when making decisions.

24
Q

What is a mixed cost?

A

A mixed cost contains both variable and fixed elements.

25
Q

What are the kinds of analysis of mixed costs?

A
  1. Account Analysis
  2. Engineering Approach
26
Q

Define what is account analysis

A

In account analysis, each account is classified as either variable or fixed based on the analyst’s knowledge of how the account behaves

27
Q

Define what is engineering approach

A

The engineering approach classifies costs based upon an industrial engineer’s evaluation of production methods, and material, labor, and overhead requirements

28
Q

The total mixed cost line can be expressed as an equation

A

Y = a + bX
Y = the total mixed cost
a = the total fixed cost
b = the total variable cost per unit of activity
X = The level of activity

29
Q

What is Least-Squares Regression Method

A

A method used to analyze mixed costs if a scattergraph plot reveals an approximately linear relationship between the X and Y variables

This method uses all of the data points to estimate the fixed and variable cost components of a mixed cost

30
Q

What is the goal of the least-squares regression method?

A

The goal of this method is to fit a straight line to the data that minimizes the sum of the squared errors

31
Q

3 ways to separate mixed costs?

A
  1. High-Low Method
  2. Least Squares Regression Method
  3. Scatter Graph/ Diagram Method

Strategic Cost Management (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions