What is the primary objective of the cost accountant?
To compute the cost/unit for financial statement presentation of COGS on the income statement and Ending Inventories on the BS
What are the 3 components of Manufacturing Costs?
1) Direct Materials 2) Direct Labor 3) Factory Overhead, (Variable Overhead & Fixed Overhead)
Essentially, the Cost of Goods Manufactured statement is a summary of what 2 accounts?
1) Direct Materials 2) Work in Process
The result of the CGM statement is used in the _____ statement or the ____ section of the income statement
Cost of Goods Sold Statement CoGS
T/F Freight out is a cost of goods sold
FALSE Freight Out is a selling cost
T/F Freight in is a cost of goods sold
What is the difference between the Direct Method & the Step Method when allocating support department costs?
The Direct Method ignores costs between service departments. The Step method recognizes costs between service departments, but only from the department with the highest costs to the departments with the lower costs. The lower cost departments ignore the costs between service departments.
What is the difference between the Step Method & the Reciprocal Method when allocating support department costs?
The Step method recognizes costs between service departments, but only from the department with the highest costs to the departments with the lower costs. The lower cost departments ignore the costs between service departments. The Reciprocal Method provides a way to adjust for the reciprocal services provided among the service departments.
These are inferior goods either discarded or sold for disposal value
These are inferior goods reworked and sold as a normal product
Normal spoilage is a necessary cost in the production process and therefore is considered ____
A Product Cost (Inventoriable Cost)
Abnormal spoilage is a ____
This considers fixed manufacturing overhead to be a product cost
Absorption (full) costing
This is a cost system that focuses on activities, determines their cost, and then uses appropriate cost drivers to trace costs to the products based on the activities
This integrates ABC with other concepts such as total quality management and target costing to produce a management system that strives for excellence through cost reduction, continuous process improvement, and productivity gains
Activity-based management (ABM)
This is the level of production actually occurring for the period
Actual activity level
This is a costing system that omits recording some or all of the journal entries to track the purchase and production of goods. goods are costed after they have been completed
This is a highly automated an integrated production process that is controlled by computers
Computer integrated manufacturing (CIM)
These include direct manufacturing labor and manufacturing overhead. They are the cost of converting direct materials into finished products
This encompasses both cost tracing and cost allocation. The cost object is the item for which the cost is being determined
This is assignment of direct costs to a cost object
This is assignment of indirect cost to the cost object
This is an item (either a product, department, or process) for which cost is being determined
This is a factor that causes it cost to be incurred. It may be volume related and/or transaction related
This is the examination of past relationships of costs and level of activity to determine predictions of future costs
This is a planning and control system that measures the cost of significant activities, identifies non-value added costs, and identifies activities that will improve organizational performance
Cost management system (CMS)
These are groupings of related costs accumulated together to the allocated to a product or some other cost object
This is the time required to complete a good from the start of the production process until the product is finished
Cycle time or throughput time
These are costs easily traced to a specific business segment
This is the cost of labor directly transforming a product. This theoretically should include fringe benefits, but frequently does not
Direct manufacturing labor