# Cost Accounting

### 24 terms by peacefuljoy27

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BEC - CPA exam

### Product cost

Is Normal Spoilage a product or period cost?

### Period cost

Is Abnormal Spoilage a product or period cost?

How does Abnormal Spoilage affect EFU calculation?

### Debit

An unfavorable variance is a

### Credit

A favorable variance is a

### Material Price Variance

Actual Units x Actual Price
Actual Units x Standard Price

### Material Usage Variance

Actual Units x Standard Price
Standard Units x Standard Price

### Labor Rate Variance

Actual Hours x Actual Rate
Actual Hours x Standard Rate

### Labor Efficiency Variance

Actual Hours x Standard Rates
Standard Hours x Standard Rates

### Margin of Safety

Difference between actual (or budgeted) sales and the sales at the break-even point

### Contribution Margin Ratio

Total Contribution Margin / Total Sales

### Formula for Break-Even Point in Dollars

Fixed Expenses / Contribution Margin ratio

### Formula for Break-Even Point in Units

Total Fixed Costs / Contribution Margin per unit

### Equal

If production equals sales, what is the relationship of direct profit to absorption profit?

### Absorption costing

If production is less than sales, profit is less under:
a. Absorption costing
b. Direction costing

### More

When absorption costs are less than direct costs, you have produced _____ than you sold.

### Greater

If production is greater than sales, profit is _______ under absorption than directing costing.

### Expected Annual Capacity

Most common approach to application of overhead.

### Expected Annual Capacity

Adjusts theoretical volume for the expected output for the current year only.

### Normal Volume

Adjusts theoretical capacity for long run product demand over a multiple year period.

### Practical Capacity

Output produced 100% of the time less output lost due to non-production time.

### Theoretical Capacity

Output is produced 100% of the time.

### Relevant Range

Level of activity where fixed costs remain fixed

Example: