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Flashcards in Deck 2 Deck (20):
1

Pareto Diagram

Used to determine issues that are the most frequent; uses a Histogram; Most frequent to least frequent

2

Fish Bone Diagram (Cause and Effect)

Use the diagram to identify the sources of the problems; Trace defect back to the source

3

Prime costs include

Direct materials and direct labor

4

Conversion costs include

Direct labor and direct overhead

5

Total Manufacturing Cost =

DM + DL + Overhead applied

6

Overapplied overhead occurs when

Applied overhead is greater than Actual overhead; credit OH to fix the amount

7

Underapplied overhead occurs when

Applied overhead is less than Actual overhead; debit OH to fix the amount

8

Normal spoilage vs. abnormal spoilage

Normal: inventoriable cost; Abnormal: Period cost

9

Equivalent units of production is comprised of three parts for FIFO:

1. completion of units on hand at the beginning of the period, 2. the units started and completed during the period, and 3. Units partially completed at period end

10

Equivalent unit cost of materials using FIFO method =

Current cost of materials used/Equivalent units

11

Equivalent unit cost of materials using weighted average method =

(Beg. cost + current cost)/Equivalent units

12

Variable Cost definition

Varies in total but is fixed per unit

13

Fixed cost definition

Fixed in total but varies per unit

14

Activity based costing is acceptable for what kind of reporting?

Internal reporting only

15

Job costing is used in the production of

Unique goods

16

Process costing is used when

The product is composed of similar mass produced units

17

Overhead application rate =

Budgeted overhead costs / estimated cost driver

18

Total applied overhead =

Actual cost driver x overhead rate

19

Product costs

DM, DL, and Overhead applied (Costs that are in the factory)

20

Example of a mixed cost

Manufacturing overhead