30 Cards in this Set
| Front | Back |
|---|---|
|
What is the COGS formula?
|
Beginning Finished Goods
+ Cost of Goods Manufactured
= Cost of Goods Available for Sale
- Ending Finished Goods Inventory
= Cost of Goods Sold
|
|
Product costs are incurred during _____ & expensed when ______. manufacturing
|
manufacturing
the final product is sold
|
|
Direct Materials
|
Materials that are used to make the product
MUST BE EASILY TRACEABLE TO THE PRODUCT
|
|
Direct Labor
|
the labor costs of all employees who work on the materials to convert them to finished goods
(i.e. wages to assembly line workers)
|
|
Manufacturing Overhead
|
all production/manufacturing costs associated with making the product other than direct materials and labor
|
|
Product Costs
|
Manufacturing costs incurred in making the products are expensed when the products are sold--direct material, direct labor, and manufacturing overhead
|
|
Period Costs
|
Non-manufacturing costs are expensed in the period incurred because they cannot be clearly identified with production of products
|
|
Which costs are expensed in the period they are incurred?
|
Period costs
|
|
Job Costing
|
A systematic way to collect and organize costs for businesses that produce small numbers of high value units
i.e. construction, shipyards, custom manufacturing, etc.
|
|
The Predetermined Overhead Rate (POHR) is established ____ and is based on estimated _____.
|
Before the period begins
OH cost and estimated "activity"
|
|
Examples of Activities (Overhead Cost Drivers)
|
Direct labor hours, direct labor $, and machine hours
|
|
POHR Formula
|
POHR = Estimated total overhead cost
estimated total activity
|
|
Activity Based Costing
|
costing method that first assigns indirect/overhead costs to multiple manufacturing activities, THEN to products based on their consumption/usage of the activities
|
|
The purpose of Activity Based Costing is:
|
to divide the TOTAL overhead cost pool into smaller activity cost pools
|
|
A _____ must be identified for each "activity" cost pool
|
Cost Driver
|
|
Activities Based Costing (ABC) is likely to reduce ___ but can be very _____ to implement.
|
cost
expensive
|
|
As companies become more automated, ____ become a larger portion of product cost.
|
Overhead
|
|
The ___ is the top accounting & financial officer and a member of top management.
|
CFO (Chief Financial Officer)
|
|
The ___ & ___ must sign the company's financial reports.
|
CEO
CFO
|
|
The ____ manages the accounting functions.
|
Controller
|
|
The ___ manages investments and the provision of capital--debt and equity.
|
Treasurer
|
|
Decentralization
|
Shared managerial or management responsibility and decision making among an organization's managers.
|
|
Work in Process
|
partially manufactured products
|
|
Backflush Costing
|
method of assigning costs to inventories backwards from Cost of Goods Sold to Work in Process or Finished Goods Inventory accounts
|
|
Balanced Scorecard
|
set of performance targets and results that show an organization's performance in meeting its responsibilities to various stakeholders
customer value perspective <--> financial performance perspective <--> internal business perspective <--> learning and growth perspective
|
|
Just-In-time Method
|
system managed so that materials are purchased just in time for production, parts are produced just when needed for the next step in the production process, and finished goods are completed just in time for sale.
|
|
Pareto Diagrams
|
diagrams that indicate how frequently each time of failure occurs
|
|
Total Quality Management (TQM)
|
managing the entire organization so it excels in its goods and services that are important to the customer
|
|
Control Charts
|
help managers distinguish between random or routine variations in quality and variations that they should investigate
|
|
Benchmarking
|
continuous process of measuring how well one is doing against performance levels either inside or outside of the organization
|
ACT 220: EXAM 1