ACC 231
About this set
Created by:
ShortyDoowap06 on February 8, 2012
Log in to favorite or report as inappropriate.
Order by
25 terms
Terms | Definitions |
|---|---|
 What are the 3 categories manufacturers separate costs into? | 1. Direct Materials 2. Direct Labor 3. Manufacturing overhead |
| Raw Materials | materials that go into the final product not necessarily unprocessed |
| What does raw material consist of? | Direct material Direct labor |
| Direct Material: | materials that become an integral part of the finished product and whose costs can be conveniently traced to the finished product |
| Direct Labor: | consists of labor costs that can be easily traced to individual units of product |
| Indirect Cost: | labor costs that cannot be physically traced to particular products or that cab be traced only at great cost and inconvenience |
| Manufacturing Overhead | includes all manufacturing costs except direct materials and direct labor. Includes indirect materials indirect labor, maintenance and repairs |
| What are the categories of non-manufacturing costs? | 1. Selling costs 2. Administrative costs |
| Selling Costs: | include all costs that re incurred to secure customer orders and get the finished product to the customer |
| Administrative Costs: | all costs associated with the general management of an organization rather than with manufacturing or selling |
| Product Costs: | include all costs involved in acquiring or making a product |
| Period Costs: | all costs that are not product costs. All selling and administrative expenses aret reated as period costs |
| Prime Cost: | the sum of direct materials costs and direct labor cost |
| Conversion Cost: | the sum of direct labor cost and manufacturing overhead cost |
| Cost Behavior: | refers to how a cost reacts to changes in the level of activity |
| What are the 3 types of cost behavior changes | variable, fixed, or mixed |
| Variable Cost: | Varies in total, in direct proportion to change in the level of activity |
| Activity base: | Varies in total, in direct proportion to change in the level of activity |
| Mixed Cost Equation | Y=a+bx |
| High Low Method | Change in cost/change in activity |
| Gross Margin Equation | Sales - COGS=Gross Margin |
| Net Operating Income equation | Gross Margin-Selling and administrative costs |
| COGS Formula | Beginning Inventory + Purchases - Ending Inventory= COGS |
| What are the three cost classifications for decision making? | 1. Differential Cost & Revenue 2. Opportunity Cost 3. Sunk Cost |
| Variable Cost = | Change in cost/change in activity |
First Time Here?
Welcome to Quizlet, a fun, free place to study. Try these flashcards, find others to study, or make your own.