Ch. 1
The three main product costs in manufacturing.
What are Direct Materials, Direct Labor, and Manufacturing Overhead?
Under actual costing, MOH is applied using this type of cost.
What are actual overhead costs?
This costing system is used for custom or small-batch production.
What is Job Costing?
Process costing is used when producing this type of product.
What are identical, homogeneous units?
ABC focuses on these as cost drivers.
What are activities?
These costs are expensed in the period incurred and are NOT product costs.
What are Period Costs?
The three inventory accounts used in manufacturing cost flow.
What are Raw Materials, Work in Process, and Finished Goods?
Formula for Predetermined Overhead Rate (POHR).
What is Estimated MOH ÷ Estimated Allocation Base?
Equivalent units are calculated as physical units × this.
What is percentage of completion?
When traditional costing allocates too much cost to a low-resource product, this occurs.
What is overcosting?
Product costs first flow into this inventory account before becoming FG and COGS.
What is Work in Process (WIP)?
When goods are sold, costs move from this account to COGS.
What is Finished Goods?
Manufacturing overhead allocated to a job equals this × actual activity used.
What is POHR?
500 units that are 60% complete equal this many equivalent units.
What is 300?
If traditional cost < ABC cost, the product is this.
What is undercosted?
Beginning WIP + Total Manufacturing Costs – Ending WIP equals this.
What is Cost of Goods Manufactured (COGM)?
A major issue with using actual MOH during the year.
What is timing — actual overhead isn’t known when pricing/selling goods?
If Allocated MOH > Actual MOH, overhead is this.
What is overallocated (overapplied)?
Direct materials added at the beginning of production are considered this type of input.
What is nonuniform input?
The four activity levels in ABC.
What are Unit-Level, Batch-Level, Product-Level, and Facility-Level?
The ultimate goal of a product costing system.
What is determining the cost per unit?
Cost of Goods Sold adjusted for inventory changes equals this on the income statement.
What is Gross Profit?
If underallocated MOH is closed to COGS, COGS will do this.
What is increase?
The five-step reconciliation report used in process costing.
What is the Production Cost Report?
Formula for an activity-based allocation rate.
What is Estimated Activity Cost Pool ÷ Estimated Cost Driver Activity?