Operations Management Cost Measurement Methods and Techniques Flashcards
What are the 3 cost objects?
Product, Income determination, and Efficiency
What are the components of product costs?
Direct materials, Direct labor, and Manufacturing overhead
If the cost object is a custom order, what type of costing is used?
Job costing
If the cost object is a mass-produced homogeneous product, what type of costing is used?
Process costing
Calculation for Cost of Goods Manufactured
Beginning WIP+DM used+DL+Manufacturing overhead applied-Ending WIP
Calculation for Cost of Goods Sold
Beginning Finished Goods+COGM-Ending Finished Goods
What are the 2 cost flow assumptions?
FIFO and weighted-average
Calculation for Equivalent units of production(weighted-average)
Units shipped out+(Ending WIP x % completed)
Calculation for Equivalent units of production(FIFO)
Units shipped out + (Ending WIP x % completed) - (Beginning inventory x % completed)
Calculation for Cost per equivalent unit(weighted average)
(Beginning cost + current cost)/Equivalent units
Calculation for cost per equivalent unit(FIFO)
Current cost/Equivalent units
Calculation for Application of Overhead
Step 1: Budgeted Overhead costs / Estimated cost driver, Step 2: Actual cost driver x Overhead rate(Step 1)
What type of costing is used when there are relatively few units produced and when each unit is unique or easily identifiable?
Job-order costing
What type of costing averages costs and applies them to a large number of homogeneous items?
Process costing
What is another name for activity-based costing?
Transaction-based costing
