Formulas
Direct Materiels + Direct Labor
What are prime costs?
Rent, utilities, taxes, insurance, depreciation
What are examples of indirect costs?
Variable cost per unit is ____ and fixed cost per unit is ______
What is Constant & Fixed?
Beg. Inventory + Purchases - Ending Inv.
What is COGS
Costs that have both fixed and variable components
What are mixed costs?
# of units sold x selling price
What is the equation for revenue?
Captures all costs involved in making a product
What is absorption costing?
Fixed cost per unit is ____
Fluctuating
Total cost / # of units
What is the unit product cost equation?
A measure of activity for direct-labor or machine hours.
What is Allocation base
DM + DL + MOH
What is Manufacturing/Product cost?
Processing units through machines or by hand, includes installing parts, cutting, painting, and packaging.
What is a unit-level activity?
Maintenance on equipment is a ______ cost.
What is facility-level?
total overhead / # of units
What is overhead cost per unit?
Includes testing, advertising products, designing, or creating products.
What is a product-level activity?
Estimated total MOH / Estimated activity or allocation base
What is the POHR equation?
Includes processing purchase orders, production orders, often in clusters of units
What is a batch-level activity
If your actual overhead was $12,000 but you applied $9,000 you have ______ by $3,000
What is underapply?
Beg. WIP + Man. costs = total WIP
Total wip - ending WIP =
What is COGM?
Activities taken to manage a facility, cannot be traced to the product. Includes security, heating, lighting, and company-wide advertising.
What is a facility-level activity?
Beg. inventory + purchases
What is cost of goods available for sale?
Anything that costs the company money
What is a cost driver?
When ABC is implemented, overhead shifts from _______
What is high-volume to low-volume?
Beg. RM + Purchases - Ending RM
What is RM used in production?
Any previously incurred cost that is no longer important to any future decision making
What is a sunk cost?