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It's Over My Head
Costly Definitions
Budget and Actual
Distribution
Application, Etc.
100
Factory and/or manufacturing costs that support production or service operations but are directly chargeable to the product.
What is Factory Overhead? (indirect factory expenses, indirect manufacturing costs, manufacturing overhead, factory burden)
100
Costs that vary in direct proportion to volume changes.
What are Variable Costs?
100
Managements operating plan expressed in quantitative terms, such as units of production and related costs.
What is a Budget?
100
An essential part of an organization but a department that does not work directly on the product.
What is a Service Department?
100
The procedure for transferring overhead costs between departments in the company records. ***DAILY DOUBLE***
What is a journal entry? (remember, this is accounting)
200
The advice offered to it's painting contractors by Sherwin-Williams Paint as covered in Business Currents 4.1.
What is " Overhead costs are a very big deal costing companies, large and small, thousands of dollars each year".
200
Costs that remain the same regardless of production or other volume changes.
What are fixed costs.
200
A budget that shows estimated costs at different production volumes.
What is a Flexible Budget?
200
Performs the actual manufacturing operations that physically change the units being processed. ***DAILY DOUBLE***
What is a Production Department?
200
The account used to record the difference between actual overhead costs and the applied overhead costs which are based on estimated application rates.
What is Under and Over Applied Overhead?
300
This method relies heavily on the ability of an observer to detect a pattern of overhead cost behavior by reviewing past cost and volume data.
What is the Observation Method? (account analysis method)
300
Costs that have characteristics of both variable and fixed costs.
What are semivariable costs? (mixed costs)
300
A subsidiary ledger that should be used when the number of factory overhead accounts becomes sizable.
What is a factory overhead ledger?
300
A method of service department cost distribution that only goes to production departments even though the service departments perform services for other service departments.
What is the Direct Distribution Method?
300
The use of activity based costing information to improve business performance by reducing costs and improving processes.
What is Activity-Based Management? (ABM)
400
This overhead analysis method compares cost data at a high production volume level to the costs at a low production volume level.
What is the High-Low Method?
400
A cost that is fixed over a production or volume range then abruptly changes (steps up) to a higher level and remains fixed over the next production or volume range. ***DAILY DOUBLE***
What is a Type A Semivariable Cost? (step-variable cost and step-fixed cost)
400
A form used for recording each type of overhead expense with a separate column for each expense classification on departmental spreadsheets or separate spreadsheets for each expense with columns to track individual departments. ****DAILY DOUBLE****
What is a Factory Overhead Analysis Spreadsheet?
400
A service department distribution method that distributes service department costs regressively to other service departments and then to production departments. ***DAILY DOUBLE***
What is Sequential Distribution Method? (step-down method)
400
This overhead allocation method considers non-volume-related activities that create (drive) overhead costs.
What is the Activity Based Costing Method? (ABC)
500
This overhead analysis method uses plot points on a graph to estimate semi variable cost behavior at various activity levels.
What is the Scattergraph Method?
500
A cost that varies continuously but not in direct proportion to volume changes and/or has a fixed starting point.
What is a Semivariable Type B cost?
500
A schedule that allows fixed cost to be recorded and tracked monthly by department.
What is Schedule of Fixed Costs? (DUH)
500
The service cost distribution method that takes into consideration that some service departments not only provide service to, but also may receive service from, other service departments.
What is the Reciprocal Method?
500
A statistics based analysis of cost behavior that uses dependent and independent variables in the calculations. ****Daily Double****
What is Least Squares Regression Method?