# BEC 1 Cost measurement Flashcards Preview

## BEC > BEC 1 Cost measurement > Flashcards

Flashcards in BEC 1 Cost measurement Deck (19)
1
Q

Cost objects

A
• resources or activities that serve as the basis for management decision
• require separate cost measurement and may be products. product lines, departments etc
2
Q

Product cost

A

Direct materials
Direct labor

3
Q

Prime costs

A

Direct materials

Direct labor

4
Q

Conversion costs

A

Direct labor

5
Q

Product costs

A

inventoriable

become cost of goods sold when sold

6
Q

Period costs

A

Expensed in the period incurred

7
Q

A

Budgeted manufacturing overhead costs / Estimated cost driver

8
Q

Relevant range

A

The relevant range is the range of volume for which the assumptions of the cost driver are valid and in which the actual value of the cost driver exists

9
Q

Costs incurred before the split off point

A

Costs incurred before the split off point are sunk costs, not relevant to further processing decisions.
Joint costs are allocated using one of the following methods.
Use % of product to total based on a ratio of:
- relative sales value
- net realizable value
- physical units

10
Q

Cost of goods manufactured

A
```WIP beginning
Direct materials
Direct labor
Less:
WIP ending```
11
Q

Cost of goods sold

A

Finished goods (beginning)
Add: Cost of goods manufactured or Purchased
Less: Finished goods (ending)
Cost of goods sold

12
Q

Job costing

A

with job costing, each unit is unique and easily identifiable costs are determined by each job

13
Q

Process costing

A

with process costing, mass produced identical units are manufactured, and costs are determined by activity/process/department

14
Q

Equivalent unit

A

used in process costing, equivalent units are fully completed and partially completed units during the period.
In applying costs, determine the units, then costs, then apply the cost flow assumption for cost per unit and allocation of costs

15
Q

Equivalent units - FIFO

A

Equivalent units
Beginning WIP x % to be completed
Add: Ending WIP x % completed

Total costs = cost incurred during the current period

16
Q

Equivalent units - weighted average

A

Equivalent units
Units completed
Add: Ending WIP x % completed

Total costs = costs in beginning WIP + costs incurred during the current period

17
Q

Abnormal Spoilage

A

charge to income of the current period

18
Q

Normal spoilage

A

increase the cost of the product produced

19
Q

Activity based costing

A

ABC is a costing theory that assumes that resource consuming activities cause costs and that costs should be assigned to benefiting products based on the activities performed and the resources consumed.

ABC system often divide costs into multiple activity centers and identify the activities that drive the costs in each cost center. Costs are then assigned based on the volume of cost drivers at the determined rate per cost driver