Terms and Definitions 1
This type of cost can be directly traced to a cost object.
What is a direct cost?
MOH typically consists of these two individual MOH costs.
What are Variable MOH and Fixed MOH costs?
Indirect Materials fall under this category of manufacturing costs.
What is MOH?
This is the formula for Gross Profit.
What is the departmental overhead rate?
These are the three manufacturing costs.
What are DM, DL, and MOH?
These make up Conversion Costs.
What are DL and MOH?
This is a type of cost that never changes in total, but does change on a per unit basis.
What is a fixed cost?
This is the formula for Contribution Margin.
What is Sales - Variable Costs?
This method of calculating the predetermined overhead rate is less accurate, but provides a fast estimate.
What is the plantwide predetermined overhead rate?
These make up Prime Costs.
What are DM and DL?
These are period costs.
What are selling and administrative expenses?
This is the definition of a variable cost.
What is a type of cost that changes in total, but does not change on a per unit basis?
This is the formula for the traditional format income statement.
What is Sales - COGS = Gross Profit - Selling and Admin. Expenses = Net Operating Income?
These are common activity bases for calculating the predetermined overhead rate.
What are Direct Labor Hours and Machine Hours?
These are product costs.
What are DM, DL, and MOH?
This is the definition of an opportunity cost.
What is the cost given up by choosing one alternative?
This is a type of cost that includes components of both fixed and variable portions.
What is a mixed cost?
This is the formula for the contribution format income statement.
What is Sales - Variable Costs = Contribution Margin - Fixed Costs = Net Operating Income?
This if the formula for calculating applied OH.
What is Predetermined OH Rate * Actual Activity?
This is a sunk cost.
What is an irrelevant cost that has already happened in the past and should not influence current decision?
The cost of producing additional units of a product.
What are incremental costs?
This is the standard cost formula.
What is y = a + bx?
This is the formula to find the predetermined overhead rate.
What is Budgeted MOH Costs / Budgeted Activity Base?
This is the formula for calculating total manufacturing costs.
What is the sum of DM, DL, and Applied MOH?