Chapter 11 Flashcards
Service Department and Joint Cost Allocation (14 cards)
Department that provides services to other subunits in the organization.
service department
Department that uses the functions of service departments.
user department
Cost center whose costs are charged to other departments in the organization.
intermediate cost center
Cost center, such as a production or marketing department, whose costs are not allocated to another cost center.
final cost center
Cost allocation method that charges costs of service departments to user departments without making allocations between or among service departments.
direct method
Method of service department cost allocation that allocates some service department costs to other service departments.
step method
Method to allocate service department costs that recognizes all services provided by any service department, including services provided to other service departments.
reciprocal method
Outputs from a common input and common production process.
joint products
Cost of a manufacturing process with two or more outputs.
joint cost
Stage of processing when two or more products are separated.
split-off point
Joint cost allocation based on the proportional values of the joint products at the split-off point.
net realizable value method
sales price of a final product minus additional processing costs necessary to prepare a product for sale.
estimated net realizable value
Joint cost allocation based on measurement of the volume, weight, or other physical measure of the joint products at the split-off point.
Physical quantities method
Outputs of joint production processes that are relatively minor in quantity or value.
by-products
