ACCT 2521: CHAPTER 1
41 Cards in this Set
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administrative costs
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all executive, organizational, and clerical costs associated with the general management of an organization rather than with manufacturing or selling
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budget
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a detailed plan for the future, usually expressed in formal quantitative terms
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common cost
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a cost that is incurred to support a number of cost objects but that cannot be traced to them individually.
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control
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the process of instituting procedures and then obtaining feedback to ensure that all parts of the organization are functioning effectively and moving toward overall company goals
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controller
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the member of the top management team who is responsible for providing relevant and timely data to managers and for preparing financial statements for external users. This person reports to the CFO.
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controlling
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actions taken to help ensure that the plan is being followed and is appropriately modified as circumstances change
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conversion cost
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direct labor cost plus manufacturing overhead cost
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cost behavior
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the way in which a cost reacts to changes in the level of activity
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cost of goods manufactured
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the manufacturing costs associated with the goods that were finished during the period
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differential cost
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a difference in cost between two alternatives
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differential revenue
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the difference in revenue between two alternatives
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direct cost
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a cost that can be easily and conveniently traced to a specified cost object
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directing and motivating
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mobilizing people to carry out plans and run routine operations
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direct labor
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factory labor costs that can be easily traced to individual units of product. Also called touch labor.
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direct materials
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materials that become an integral part of a finished product and whose costs can be conveniently traced to it.
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feedback
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accounting and other reports that help managers monitor performance and focus on problems and/or opportunities that might otherwise go unnoticed
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financial accounting
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the phase of accounting concerned with providing information to stockholders, creditors, and others outside of the organization
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finished goods
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units of product that have been completed but not yet sold to customers
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fixed cost
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a cost that remains constant, in total, regardless of changes in the level of activity within the relevant range. If expressed on a per unit basis, it varies inversely with the level of activity.
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incremental cost
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an increase in cost between two alternatives
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indirect cost
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a cost that cannot be easily and conveniently traced to a specified cost object
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indirect labor
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the labor costs of janitors, supervisors, material handlers, and other factory workers that cannot be conveniently traced to particular products
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indirect materials
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small items of material such as glue and nails that may be an integral part of a finished product, but whose cost cannot be easily or conveniently traced to it
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inventoriable costs
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synonym for product costs
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managerial accounting
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the phase of accounting concerned with providing information to managers for use within the organization
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manufacturing overhead
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all manufacturing costs except direct materials and direct labor
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opportunity cost
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the potential benefit that is given up when one alternative is selected over another
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performance report
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a detailed report comparing budgeted data to actual data
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period costs
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costs that are taken directly to the income statement as expenses in the period in which they are incurred or accrued
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planning
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selecting a course of action and specifying how the action will be implemented
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planning and control cycle
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the flow of management activities through planning, directing and motivating, and controlling, and then back to planning again
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prime cost
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direct materials plus direct labor cost
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product costs
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all costs that are involved in acquiring or making a product. Int he case of manufactured goods, these consist of direct materials, direct labor, and manufacturing overhead. (aka inventoriable costs)
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raw materials
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any materials that go into the final product
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relevant range
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the range of activity within which assumptions about variable and fixed cost behavior are valid
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schedule of cost of goods manufactured
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a schedule showing the direct materials, direct labor, and manufacturing overhead costs incurred during a period and the portion of those costs that are assigned to Work in Process and Finished Goods
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segment
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any part of an organization that can be evaluated independently of other parts and about which the manager seeks financial data. Examples include a product line, a sales territory, a division, or a department
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selling costs
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all costs that are incurred to secure customer orders and get the finished product or service into the hands of the customer
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sunk cost
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a cost that has already been incurred and that cannot be changed by any decision made now or in the future
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variable cost
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a cost that varies, in total, in direct proportion to changes in the level of activity. constant per unit
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work in process
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units of product that are only partially complete
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ACCT 2521: CHAPTER 1