Chapter 2
total of labor and overhead for a product; the costs that “convert” the direct material into the finished product
what are conversion costs?
CVP represents this managerial accounting process
what is cost volume profit analysis?
materials used in production but not efficiently traceable to a specific unit of production
what are indirect materials?
costing system used when a standardized process is used to manufacture identical products and
what is process costing?
budget that begins with zero dollars
what is a zero based budget?
activity that is the reason for the increase or decrease of another cost;
what is a cost driver?
Fixed costs + desired profit /Contribution margin per unit
target profit (in units)
information system that traces the individual costs directly to the final product and not to production departments
what is job costing?
Selling and administrative (S&A) expenses are labeled as these kinds of costs
what are period costs?
certification for a specialist in corporate accounting management,
what is a CMA?
labor directly related to the manufacturing of the product or the production of a service
what is direct labor?
the amount by which a product’s selling price exceeds its total variable cost per unit.
what is contribution margin?
direct material expenses and direct labor costs
what are prime costs?
direct material expenses and direct labor costs
what are prime costs?
someone who relies on the financial statements and annual reports
what is an external user?
costs typically related to a particular time period instead of attached to the production of a product
what are period costs?
the percentage of a unit’s selling price that exceeds total unit variable costs.
what is contribution margin ratio?
manufacturing costs incurred less the ending work in process inventory
what are cost of goods manufactured?
this is the difference between how process costing and job order costing
what is how costs are assigned?
accumulation of costs that are incurred during the production
what is a cost pool?
costs incurred in the production process that are not economically feasible to measure
what is manufacturing overhead or overhead?
dollar amount (total sales dollars) or production level (total units produced) at which the company has recovered all variable and fixed costs.
what is break-even?
document created for each job that includes all material, labor, and overhead costs for that job
what is a job cost sheet?
units that are not fit for sale due to breakage or other imperfections.
what is spoilage?
Every class, these two students are alway late