ACCT2012 Lecture 3 Flashcards
Inventorial Product Costs
Direct + Indirect costs of producing goods
*consists of manufacturing process costs only
Job Costing
Process for assigning costs to custom products
- cost objects = individual jobs
- DM, DL traced to particular job (by source docs)
- manufacturing overhead allocated (i.e. all production costs - DM - DL)
*2-stage process
Cost Pool
group of individual costs that are accumulated for a particular purpose.
Actual Costing
allocation rate = actual costs / actual quantity of AB
Normal Costing
allocation rate = estimated costs / estimated quantity of AB
applied overhead = estimated rate x actual quantity of AB
Overapplied (Underapplied)
actual costs are less (more) than total amount of overhead allocated
*Under normal costing, periodic adjustments are needed to reconcile
Process Costing
approach for assigning product costs to mass‐produced products.
2 stage process
- Costs are assigned to departments
2. Allocated from departments to individual product units.
Conversion Costs
DL + Manufacturing Overhead
Weighted Average Costing Method
costs from beginning WIP are averaged with costs incurred during current period, and then allocated to units completed and ending WIP
