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managerial accounting chap 2

STUDY
PLAY
actual cost
the actual cost incurred. so the historical or past cost of a product
cost object
anything where you can trace the cost that it is incurring
cost accumulation
a systemic way of adding up all of the costs
difference between direct and indirect costs
a direct cost can be traced to the object and an indirect cost cannot
Cost driver
anything that radically effects cost. Usually a variable cost but can be a fixed cost if it is over a long time span
price per unit calculation
total manufacturing cost/ number of units manufactured
unit cost=
average cost
total manufacturing cost=
COGS+ ending inventory
direct material costs
how much it costs to obtain all of the materials
direct manufacturing costs
wages of assembly line workers working on the cost objects
indirect manufacturing costs
related to producing the cost object but cannot be traced in an economically feasible way -- also called overhead costs
overhead costs
indirect manufacturing costs
period costs
all costs in income statement besides COGS of production costs
direct material costs=
begging inventory+ direct material purchases-ending inventory= direct material costs
total manufacturing costs=
direct materials used+direct manufacturing labor+manufacturing overhead costs
cost of goods manufactured
cost of goods brought to completion. So the cost of just the total produced finished goods total manufacturing costs-wip= cogm
COGS=
begging inventory+cogm - ending inventory of finished goods
gross margin=
revenue-cogs
operating income=
total revenue for operating - cogs - operating period costs
prime costs
all direct manufacturing costs (direct material + direct manuf labor)
conversion costs
all manufacturing costs that are not direct materials. It represents all costs incurred while converting materials into a final good
over time cost type and idle time
usually indirect cost or overhead