Exam 2 (Ch 18, 19) Flashcards Preview

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Flashcards in Exam 2 (Ch 18, 19) Deck (29)
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1

Defn: The manufacturing costs of the goods that finished the production process in a given accounting period.

Cost of Goods Manufactured

2

Defn: An inventory account for completed goods that have not yet been sold.

Finished Goods Inventory (FG)

3

Defn: An inventory account of materials used to manufacture a product.

Raw Materials Inventory (RM)

4

Defn: The cost of purchasing or making a product.

The cost is recorded as an asset and then expensed when the product is sold.

Product cost

5

Defn: The labor cost of employees who convert raw materials into finished products.

Direct Labor (DL)

6

Defn: An accounting system that accumulates costs by process;

Used by companies that manufacture identical units through a series of unitform production steps or processes.

Process costing system

7

Formula: Predetermined Overhead Allocation Rate

= (Tot. Est. Overhead Cost) / (Tot. Est. Qty of Overhead Allocation Base)

8

The purpose of the information generated by managerial accounting is used by a company's management to _________ and ___________ operations.

Plan and control operations

9

Defn: Labor costs for activities that support the production process but either cannot be conveniently traced directly to specific finished products or are not large enough to justify tracing to the specific product.

Indirect Labor

10

Defn: Cost that can be easily and cost-effectively traced to a cost object.

Direct Cost

11

Defn: The cost to convert raw materials into finished goods:

Direct Labor + MOH

Conversion Cost

12

What is the flow of matierals (or formula) for calculating the Cost of Goods Manufactured?

Beginning WIP + DM Used + DL + MOH - Ending WIP

13

Defn: A denominator that links indirect costs to cost objects;

Ideally it is the primary cost driver of the indirect costs.

Allocation base

14

Defn: An inventory account for goods that have been started in the manufacturing process but are not yet complete.

Work-in-Process Inventory (WIP)

15

Defn: Anything for which managers want a separate measurements of cost.

Cost object

16

Defn: A company that uses labor, equipment, supplies, and facilities to convert raw materials into finished products.

Manufacturing company

17

Who are the primary users of managerial accounting?

company managers and employees

18

Formula: Allocated Mfg Overhead Cost

= (Predetermined Overhead Allocation Rate) x (Act. Qty of Allocation base used by ea. job)

19

Defn: A document that shows the direct materials, direct labor, and manufacturing overhead costs for an individual job.

Job Cost Record

20

Defn: Manufacturing costs that cannot be easily and cost-effectively traced to a cost object;

Includes all manufacturing costs except direct materials and direct labor

Manufacturing Overhead (MOH)

21

Defn: Estimated overhead cost per unit of the allocation base, calculated at the beginning of the accounting period.

Total estimated overhead cost / total estimated quantity of the overhead allocation base

Predetermined Overhead Allocation Rate

22

Defn: Direct Materials plus Direct Labor

Prime Cost

23

Defn: When the actual maunfacturing overhead costs are more than allocated manufacturing overhead costs.

Underallocated Overhead

24

Defn: An operating cost that is expensed in the accounting period in which it is incurred.

Period Cost

25

Defn: Cost that cannot be easily or cost-effectively traced to a cost object

Indirect Cost

26

Defn: Materials used in making a product but whose costs either cannot be conveniently traced directly to specific finished products or are not large enough to justify tracing to the specific product.

Indirect Materials

27

Defn: When the actual MOH costs are less than allocated MOH.

Overallocated Overhead

28

Defn: A company that resells products previously bought from suppliers.

Merchandising company

29

Defn: Marterials that become a physical part of a finished product and whose costs are easily traced to the finished product.

Direct Materials (DM)