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Chapter 2 - Flashcards

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Class:ACC 312 - FUNDAMENTALS OF MANAGERIAL ACC
Subject:Accounting
University:University of Texas - Austin
Term:Spring 2010
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product cost cost assigned to goods that were purchased or manufactured for resale... in the period of sale product costs are recognized as COGS. can also be called an inventoriable cost
period cost identified with the period of time in which they were incurred rather than with units of purchased or produced goods. research and development, selling, and administrative costs are period costs.
direct material In variance analysis (accounting) direct material total variance is the difference between the actual cost of actual number of units produced and its budgeted cost in terms of material.
direct labor cost of salaries, wages, and fringe benefits for personnel who work directly on the manufactured products.
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manufacturing overhead indirect material, indirect labor, and other manufacturing costs.
indirect material cost of materials that are required for the production process but do not become an integral part of the finished product.
indirect labor cost of personnel who do not work directly on the production whose services are necessary for the manufacturing process: production department supervisors, custodial employees, and security guards.
other manufacturing costs service departments or support departments- those that do not work directly on manufacturing products but are necessary for the manufacturing process to occur... overtime premium- extra compensation paid to an employee who works beyond the normally scheduled time.
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conversion costs direct labor and overhead because they are the cost of converting raw material into finished goods.
prime costs direct material and direct labor
activity refers to the measure on an organization's output of products or service
cost driver a characteristic of an activity or even that causes cost to be incurred by that activity or event.
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variable cost expenses that change in proportion to the activity of a business.
fixed cost remains unchanged in totalas the level of activity varies
cost object A cost object is a tangible input for a product manufactured/Service provided, like labor or material.
controllable cost if a manager can control or heavily influence the level of a cost
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opportunity cost the benefit that is sacrificed when the choice of one action precludes taking an alternative course of action
out of pocket cost those that require cash
sunk cost costs that have been incurred in the past
differential cost the amount by which the cost differs under two alternative options
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incremental cost the increase in cost from one alternative to another
marginal cost extra cost incurred when one additional unit is produced
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 product costcost assigned to goods that were purchased or manufactured for resale... in the period of sale product costs are recognized as COGS. can also be called an inventoriable cost
 period costidentified with the period of time in which they were incurred rather than with units of purchased or produced goods. research and development, selling, and administrative costs are period costs.
 direct materialIn variance analysis (accounting) direct material total variance is the difference between the actual cost of actual number of units produced and its budgeted cost in terms of material.
 direct laborcost of salaries, wages, and fringe benefits for personnel who work directly on the manufactured products.
 manufacturing overheadindirect material, indirect labor, and other manufacturing costs.
 indirect materialcost of materials that are required for the production process but do not become an integral part of the finished product.
 indirect laborcost of personnel who do not work directly on the production whose services are necessary for the manufacturing process: production department supervisors, custodial employees, and security guards.
 other manufacturing costsservice departments or support departments- those that do not work directly on manufacturing products but are necessary for the manufacturing process to occur... overtime premium- extra compensation paid to an employee who works beyond the normally scheduled time.
 conversion costsdirect labor and overhead because they are the cost of converting raw material into finished goods.
 prime costsdirect material and direct labor
 activityrefers to the measure on an organization's output of products or service
 cost drivera characteristic of an activity or even that causes cost to be incurred by that activity or event.
 variable costexpenses that change in proportion to the activity of a business.
 fixed costremains unchanged in totalas the level of activity varies
 cost objectA cost object is a tangible input for a product manufactured/Service provided, like labor or material.
 controllable costif a manager can control or heavily influence the level of a cost
 opportunity costthe benefit that is sacrificed when the choice of one action precludes taking an alternative course of action
 out of pocket costthose that require cash
 sunk costcosts that have been incurred in the past
 differential costthe amount by which the cost differs under two alternative options
 incremental costthe increase in cost from one alternative to another
 marginal costextra cost incurred when one additional unit is produced
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