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Flashcards in Chapter 2 Deck (36):
1

Costs required to manage the organization and provide staff support, including executive salaries, costs of data processing, and legal costs

Administrative Costs

2

Sales price minus Variable cost per unit`

Contribution Margin

3

Sum of direct labor and manufacturing overhead

Conversion Costs

4

Sacrifice of resources

Cost

5

Process of assigning indirect costs to products, services, people, business units, etc.

Cost Allocation

6

Method used to assign costs in the cost pool to the cost objects

Cost Allocation Rule

7

Diagram or flowchart illustrating the cost allocation process

Cost Flow Diagram

8

Any end to which a cost is assigned

Cost Object

9

Expense assigned to products sold during a period

Cost of Goods Sold

10

Collection of costs to be assigned to the cost objects

Cost Pool

11

Any cost that can be directly (unambiguously) related to a cost object

Direct Cost

12

Work that actually transforms materials into finished products during the production process

Direct Labor

13

Product costs that can be feasibly identified with units of production

Direct Manufacturing Costs

14

Those materials that can feasibly be identified directly with the product

Direct Materials

15

Cost that is charged against revenue in an accounting period

Expense

16

Product fully completed, bunt not yet sold

Finished Goods

17

Costs that are unchanged as volume changes within the relevant range of activity

Fixed Costs

18

All variable and fixed manufacturing costs; used to cote product's inventory value under GAAP

Full Absorption Cost

19

Sum of all costs of manufacturing and selling a unit or product (includes both variable and fixed costs)

Full Cost

20

Revenue minus cost of goods sold on income statements. Per unit, the blank equals Sales price minus full absorption cost per unit

Gross Margin

21

Any cost that cannot be directly related to a cost object

Indirect Cost

22

All product costs except direct costs

Indirect Manufacturing Costs

23

Costs added to inventory accounts

Inventoriable Costs

24

All production costs except direct labor and direct materials

Manufacturing Overhead

25

Costs required to obtain customer orders and provide customers with finished products, including advertising, sales, commissions, and shipping costs

Marketing Costs

26

Excess of operating revenue over the operating costs necessary to generate those revenues

Operating Profit

27

Forgone benefit from the best foregone alternative course of action

Opportunity Cost

28

Past, present, or future cash outflow

Outlay Cost

29

Costs recognized for financial reporting when incurred

Period Costs

30

Sum of all direct materials and direct labor

Prime Costs

31

Costs assigned to the manufacturing of products and recognized for financial reporting when sold

Product Costs

32

Activity levels within which a cost estimate is valid; the range within which a given fixed of unit variable cost will be unchanged even though the volume changes

Relevant Range

33

Cost that has both fixed and variable components

Semi-variable/Mixed Cost

34

Cost that increase with volume in steps

Step/Semifixed Cost

35

Costs that change in direct proportion with a change in volume within the relevant range of activity

Variable Costs

36

Product in the production process but not yet complete

Work in Process