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Flashcards in Cost Measurement & Assignment (M46) Deck (131)
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1

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

2

What are the 3 components of Manufacturing Costs?

1) Direct Materials 2) Direct Labor 3) Factory Overhead, (Variable Overhead & Fixed Overhead)

3

Essentially, the Cost of Goods Manufactured statement is a summary of what 2 accounts?

1) Direct Materials 2) Work in Process

4

The result of the CGM statement is used in the _____ statement or the ____ section of the income statement

Cost of Goods Sold Statement CoGS

5

T/F Freight out is a cost of goods sold

FALSE Freight Out is a selling cost

6

T/F Freight in is a cost of goods sold

TRUE

7

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.

8

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.

9

These are inferior goods either discarded or sold for disposal value

Spoilage (Scraps)

10

These are inferior goods reworked and sold as a normal product

Defective Units

11

Normal spoilage is a necessary cost in the production process and therefore is considered ____

A Product Cost (Inventoriable Cost)

12

Abnormal spoilage is a ____

Period Cost

13

This considers fixed manufacturing overhead to be a product cost

Absorption (full) costing

14

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

Activity-Based Costing

15

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)

16

This is the level of production actually occurring for the period

Actual activity level

17

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

Backflush costing

18

This is a highly automated an integrated production process that is controlled by computers

Computer integrated manufacturing (CIM)

19

These include direct manufacturing labor and manufacturing overhead. They are the cost of converting direct materials into finished products

Conversion costs

20

This encompasses both cost tracing and cost allocation. The cost object is the item for which the cost is being determined

Cost assignment

21

This is assignment of direct costs to a cost object

Cost tracing

22

This is assignment of indirect cost to the cost object

Cost allocation

23

This is an item (either a product, department, or process) for which cost is being determined

Cost object

24

This is a factor that causes it cost to be incurred. It may be volume related and/or transaction related

Cost driver

25

This is the examination of past relationships of costs and level of activity to determine predictions of future costs

Cost estimation

26

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)

27

These are groupings of related costs accumulated together to the allocated to a product or some other cost object

Cost pools

28

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

29

These are costs easily traced to a specific business segment

Direct costs

30

This is the cost of labor directly transforming a product. This theoretically should include fringe benefits, but frequently does not

Direct manufacturing labor