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Study sets matching "cost accounting chapter 6"

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Study sets matching "cost accounting chapter 6"

22 terms
Cost Accounting Chapter 6
Budget
Basic operating budget steps
Sales Budget
Production Budget
Simply the plan, stated in financial terms, of how the organi…
1. Prepare the revenues budget... 2. Prepare the production budg…
This is the first budget to be prepared and is based on sales…
Employ unit sales from the Sales Budget, as well as beginning…
Budget
Simply the plan, stated in financial terms, of how the organi…
Basic operating budget steps
1. Prepare the revenues budget... 2. Prepare the production budg…
34 terms
Cost Accounting Chapter 6
Budget
Benefits of a budget
Cooordination
Communication
a) The quantitative expression of a proposed plan of action b…
~Promote coordination and communication among subunits within…
Is meshing an balancing all aspect of production or service a…
Is making sure those goals are understood by all employees
Budget
a) The quantitative expression of a proposed plan of action b…
Benefits of a budget
~Promote coordination and communication among subunits within…
19 terms
Cost Accounting Chapter 6
activity based budgeting
budgetary slack
cash budget
continuous budget
a budgeting approach that focuses on the cost of activities r…
occurs when managers intentionally underestimate budgeted rev…
a financial statement that estimates cash receipts and cash e…
A 12-month budget that rolls forward one month as the current…
activity based budgeting
a budgeting approach that focuses on the cost of activities r…
budgetary slack
occurs when managers intentionally underestimate budgeted rev…
20 terms
Cost Accounting Chapter 6
What is process costing?
How do you calculate unit product cost?
What are equivalent units?
If DM is added uniformly how is the th…
a product costing system that accumulates costs according to…
process costs per department divided by number of equivalent…
number of the same or similar complete units that could have…
It is the same for conversion costs
What is process costing?
a product costing system that accumulates costs according to…
How do you calculate unit product cost?
process costs per department divided by number of equivalent…
9 terms
Cost Accounting Chapter 6
Predetermined overhead rate
Two- stage cost allocation
Job
Job costing
Cost per unit of the allocation base used to charge overhead…
Process of first allocating costs to intermediate cost pools…
Unit of a product that is easily distinguishable from other u…
Accounting system that traces costs to individual units or to…
Predetermined overhead rate
Cost per unit of the allocation base used to charge overhead…
Two- stage cost allocation
Process of first allocating costs to intermediate cost pools…
11 terms
Cost Accounting - Chapter 6
Batch Production Processes
Cost Reconciliation
Equivalent Units of Output
FIFO Costing Method
-A process that produces batches of different products that a…
-The last step in building a production report for process co…
-The second step in building a production report for process…
-The equivalent units and manufacturing costs in beginning wo…
Batch Production Processes
-A process that produces batches of different products that a…
Cost Reconciliation
-The last step in building a production report for process co…
9 terms
Chapter 6 Managerial Cost Accounting
Cost Management System
Predetermined Overhead Rate
Two Stage Cost Allocation
Job
System to provide information about the costs of process, pro…
Cost per unit of the allocation base used to charge overhead…
Process of first allocating costs to intermediate cost pools…
Unit of a product that is easily distinguishable from other u…
Cost Management System
System to provide information about the costs of process, pro…
Predetermined Overhead Rate
Cost per unit of the allocation base used to charge overhead…
Cost Accounting Chapter 6
Activity-Based Accounting (ABB)
Budgetary Slack
Cash Budget
Controllability
Budgeting approach that focuses on the budgeted cost of the a…
the practice of underestimating budgeted revenues or overesti…
schedule of expected cash receipts and disbursements
degree of influence that a specific manager has over costs, r…
Activity-Based Accounting (ABB)
Budgeting approach that focuses on the budgeted cost of the a…
Budgetary Slack
the practice of underestimating budgeted revenues or overesti…
22 terms
Chapter 6 Cost Accounting
Job Order
Process Costing
Production Costs/Production Quantity
Production Cost
Small quantity or making a specific product... assign the costs…
large quantities of the same products or services... assign cost…
How to Find Unit Cost
costs accumulated by department, product ... includes DM, DL, an…
Job Order
Small quantity or making a specific product... assign the costs…
Process Costing
large quantities of the same products or services... assign cost…
12 terms
Cost Accounting Chapter 6 Terms
batch production processes
cost reconciliation
equivalent units of output
fifo costing method
a process that produces batches of different products that ar…
determining whether the costs assigned to units transferred o…
the complete units that could have been produced given the to…
a unit costing method that excludes prior period work and cos…
batch production processes
a process that produces batches of different products that ar…
cost reconciliation
determining whether the costs assigned to units transferred o…
11 terms
Cost Accounting - Chapter 6
Batch Production Processes
Cost Reconciliation
Equivalent Units of Output
FIFO Costing Method
-A process that produces batches of different products that a…
-The last step in building a production report for process co…
-The second step in building a production report for process…
-The equivalent units and manufacturing costs in beginning wo…
Batch Production Processes
-A process that produces batches of different products that a…
Cost Reconciliation
-The last step in building a production report for process co…
5 terms
Cost Accounting Chapter 6
Product Costs
managerial reports/ general purpose fi…
Managerial Reports
Cost/Benefit Analysis
What is relevant for both managerial reports and general purp…
product costs are relevant for both __________ ________ and _…
Provide decision useful information that is especially import…
Gathering Information for a cost system can be expensive and…
Product Costs
What is relevant for both managerial reports and general purp…
managerial reports/ general purpose fi…
product costs are relevant for both __________ ________ and _…
11 terms
Cost Accounting Chapter 6
Continuous Loss
Cost of Production Report
Discrete Loss
Equivalent Units of Production (EUP),
any reduction in units that occurs uniformly throughout a pro…
a process costing document that details all operating and cos…
a reduction in units that occurs at a specific point in a pro…
an approximation of the number of whole units of output that…
Continuous Loss
any reduction in units that occurs uniformly throughout a pro…
Cost of Production Report
a process costing document that details all operating and cos…
15 terms
Cost Accounting Chapter 6
Normal Loss
Abnormal Loss
Product Cost
Period Cost
A loss incurred during normal operations. It is included in t…
A loss that is not typical to the processing cycle. It is acc…
The costs used to create a product including direct labor, ma…
Any cost that cannot be capitalized into prepaid expenses, in…
Normal Loss
A loss incurred during normal operations. It is included in t…
Abnormal Loss
A loss that is not typical to the processing cycle. It is acc…
10 terms
Cost Accounting Chapter 6
cost management system
Basic Cost Flow Model
predetermined overhead rate
two-stage cost allocation
System to provide information about the costs of process, pro…
Beginning balance + Transfers in - Transfers out = End Balanc…
Cost per unit of the allocation base used to charge overhead…
Process of first allocating costs to intermediate cost pools…
cost management system
System to provide information about the costs of process, pro…
Basic Cost Flow Model
Beginning balance + Transfers in - Transfers out = End Balanc…
12 terms
Cost Accounting Chapter 6
Equivalent Units of Production
Weighted Average Method
First-In, First-Out Method
Total Cost to Account For
An approximation of the number of whole units of output that…
The method of cost assignment that computes an average cost p…
The method of cost assignment that computes an average cost p…
The sum of the costs in beginning inventory and the costs of…
Equivalent Units of Production
An approximation of the number of whole units of output that…
Weighted Average Method
The method of cost assignment that computes an average cost p…
12 terms
cost accounting - chapter 6
revenue budget
production budget
DM purchases Budget
ending inventory budget
# of units X price = budgeted revenue
beginning FG inventory... + units produced... = total units availbl…
beginning DM inventory... + purchases... = total available for sale…
# of units X cost per unit
revenue budget
# of units X price = budgeted revenue
production budget
beginning FG inventory... + units produced... = total units availbl…
9 terms
Cost Accounting Chapter 6
Budget
Strategy
Operating Budget
Financial Budgets
the quantitative expression of a management's proposed plan f…
specifies how an organization matches its own capabilities wi…
budget that includes budgets reflecting the planned operation…
budget that consists of a capital expenditures budget, a Cash…
Budget
the quantitative expression of a management's proposed plan f…
Strategy
specifies how an organization matches its own capabilities wi…
12 terms
Cost accounting chapter 6
Budget
Steps in preparing an operating budget
Strategy
budgeting cycle's steps during the cou…
1. The quantitative expression of a proposed plan of action b…
1. Identify the problem and uncertainties ... 2. Obtain informat…
How an organization matches its capabilities with its opportu…
1. Before the start of the fiscal year... 2. At the beginning of…
Budget
1. The quantitative expression of a proposed plan of action b…
Steps in preparing an operating budget
1. Identify the problem and uncertainties ... 2. Obtain informat…
10 terms
Cost accounting chapter 6
Steps in preparing an operating budget
Rolling budget
Responsibility accounting
Cost Center
Identify the problem and uncertainties; obtain information; m…
Also known as continuous budgey/rolling forecast- a budget th…
Is a system that measures the plans, budgets, actions, and ac…
The manager is accountable for costs only
Steps in preparing an operating budget
Identify the problem and uncertainties; obtain information; m…
Rolling budget
Also known as continuous budgey/rolling forecast- a budget th…
8 terms
Cost Accounting 1 - Chapter 6
Production report
processing department
transferred-in costs
equivalent units
a report that summarizes all activity in a department's Work…
any location in an organization where work is performed on a…
costs attached to products that have been received from a pri…
the product of the number of partially completed units and th…
Production report
a report that summarizes all activity in a department's Work…
processing department
any location in an organization where work is performed on a…
23 terms
cost accounting chapter 6 & 7
Budget
advantages of budgets
operating budget
financial budget
-the quantitative expression of a proposed plan of action by…
-provides a framework for judging performance... - motivate mana…
building blocks leading to the creation of a budgeted income…
building blocks based on the operating budget that leads the…
Budget
-the quantitative expression of a proposed plan of action by…
advantages of budgets
-provides a framework for judging performance... - motivate mana…
7 terms
Cost Accounting-Chapter 6-Process Costing
Put Simply, what is Process Costing?
Describe 3 Features of Process Costing.
Name a difference between Process and…
When should one use Operation Costing?
Multiple steps, involving a Work in Process for multiple depa…
-Good for homogenous, mass produced units... -Uses departments,…
Job Order Costing deals more with individual and custom-made…
When there's a blend of job order and process costing. It's u…
Put Simply, what is Process Costing?
Multiple steps, involving a Work in Process for multiple depa…
Describe 3 Features of Process Costing.
-Good for homogenous, mass produced units... -Uses departments,…
11 terms
Cost Accounting 8 ed chapter 6
Continuous loss pg 233
cost of production report pg 222
discrete loss pg 233
equivalent units of production (EUP) p…
any reduction in units that occurs uniformly throughout a pro…
a process costing document that details all operating and cos…
a reduction in units that occurs at a specific point in a pro…
an approximation of the number of whole units of output that…
Continuous loss pg 233
any reduction in units that occurs uniformly throughout a pro…
cost of production report pg 222
a process costing document that details all operating and cos…
27 terms
Cost Accounting: Chapter 6-8
Cost Management System
Predetermined Overhead Rate
Two-Stage Cost Allocation
Job
System to provide information about the costs of process, pro…
Cost per unit of the allocation base used to charge overhead…
Process of first allocating cost to intermediate cost pools a…
Unit of a product that is easily distinguishable from other u…
Cost Management System
System to provide information about the costs of process, pro…
Predetermined Overhead Rate
Cost per unit of the allocation base used to charge overhead…
10 terms
Cost Behavior-Chapter 6 Managerial Accounting
Cost behavior
Fixed costs
Variable costs
Step costs
How costs react to changes in production volume or other leve…
Costs that remain the same in total when production volume in…
Costs that stay the same per unit, but change in total, as pr…
Costs that vary with activity in steps and may look like and…
Cost behavior
How costs react to changes in production volume or other leve…
Fixed costs
Costs that remain the same in total when production volume in…
9 terms
Cost Accounting Chapter 6: Activity Based Costing
Traditional Costing Systems
Department Costing
Activity Based Costing
Activities
costing system that uses one cost pool and one cost driver to…
The use of a cost pool and cost driver for each different dep…
costing system that goes beyond traditional and departmental…
Task or unit of work with a specific purpose
Traditional Costing Systems
costing system that uses one cost pool and one cost driver to…
Department Costing
The use of a cost pool and cost driver for each different dep…
19 terms
Cost Accounting 320: Chapter 6
Activity-Based Accounting (ABB)
Budgetary Slack
Cash Budget
Controllability
Budgeting approach that focuses on the budgeted cost of the a…
the practice of underestimating budgeted revenues or overesti…
schedule of expected cash receipts and disbursements
degree of influence that a specific manager has over costs, r…
Activity-Based Accounting (ABB)
Budgeting approach that focuses on the budgeted cost of the a…
Budgetary Slack
the practice of underestimating budgeted revenues or overesti…
13 terms
Cost Managerial Accounting Chapter 6
Cost volume Profit Analysis
gross profit
contribution margin per unit
contribution margin ratio
A tool that focuses on the relationships among a company's pr…
the difference between sales and cost of goods sold
the sales price per unit of product, less all variable costs…
the contribution margin divided by sales . used to calculate…
Cost volume Profit Analysis
A tool that focuses on the relationships among a company's pr…
gross profit
the difference between sales and cost of goods sold
29 terms
Cost Accounting Chapter 6 version 2
The quantitative expression of a propo…
financial and nonfinancial aspects
1. Promotes coordination and communica…
1. Prepare the sales/revenue budget... 2.…
Budget
The budget generally includes both the plan's ______ and ____…
What are the four benefits of budgeting?
What are the 9 steps in preparing and operating budget?
The quantitative expression of a propo…
Budget
financial and nonfinancial aspects
The budget generally includes both the plan's ______ and ____…
9 terms
cost/managerial accounting chapter 6
cost management system
predetermined overhead rate
two-stage cost allocation
job
system to provide information about the costs of process, pro…
cost pr unit of the allocation base used to charge overhead p…
process of first allocating costs to intermediate cost pools…
unit of a product that is easily distinguishable from other u…
cost management system
system to provide information about the costs of process, pro…
predetermined overhead rate
cost pr unit of the allocation base used to charge overhead p…
17 terms
Accounting Chapter 6 Cost Variable
Cost Behavior
three common cost behaviors
variable costs
fixed costs
How costs change as volume changes
1. variable costs... 2. fixed costs... 3. mixed costs
total variable costs change in direct proportion to changes i…
-total fixed costs stay constant over relevant range (normal…
Cost Behavior
How costs change as volume changes
three common cost behaviors
1. variable costs... 2. fixed costs... 3. mixed costs
25 terms
Accounting Chapter 6: Inventory and Cost of Goods Sold
Average days in inventory
Cost of goods sold
Finished goods
First-in, first-out method (FIFO)
Approximate number of days the average inventory is held. It…
Cost of the inventory that was sold during the period.
Inventory items for which the manufacturing process is comple…
Inventory costing method that assumes the first units purchas…
Average days in inventory
Approximate number of days the average inventory is held. It…
Cost of goods sold
Cost of the inventory that was sold during the period.
29 terms
Chapter 6 Cost Accounting Master budget
Budget
Budgets and Managers
Budgeting Cycle
*is the quantitative expression of a proposed plan of action…
Communicate directions and goals to different departments of…
1. Before the start of a fiscal year, managers at all levels…
Budget
*is the quantitative expression of a proposed plan of action…
Budgets and Managers
Communicate directions and goals to different departments of…
31 terms
Cost Accounting: A Managerial Emphasis- Chapter 6
Budget
Masters Budget
Pro Forma Statement
Advantages of Budgets
The qualitative expression of a proposed plan of action by ma…
Expresses management's operating and financial plans for a sp…
Another name for budgeted financial statements.
1. Promote Coordination and Communication among subunits with…
Budget
The qualitative expression of a proposed plan of action by ma…
Masters Budget
Expresses management's operating and financial plans for a sp…
30 terms
Cost Accounting: A Managerial Emphasis- Chapter 6
Budget
Masters Budget
Pro Forma Statement
Advantages of Budgets
The qualitative expression of a proposed plan of action by ma…
Expresses management's operating and financial plans for a sp…
Another name for budgeted financial statements.
1. Promote Coordination and Communication among subunits with…
Budget
The qualitative expression of a proposed plan of action by ma…
Masters Budget
Expresses management's operating and financial plans for a sp…
17 terms
Cost Acc Chapter 6
cost management system
reasons to calculate product/service c…
cost allocation
fundamental themes for cost system des…
system to provide information about the costs of process, pro…
decisions making, deciding what to sell, setting prices, know…
cost pools (DM, DL, OH) of money are distributed using a cost…
cost systems should have a decision focus.. different cost in…
cost management system
system to provide information about the costs of process, pro…
reasons to calculate product/service c…
decisions making, deciding what to sell, setting prices, know…
22 terms
Chapter 6 Cost Accounting Edition 14 Horngren
Master Budget
Operating Budget
Kaizen Budgeting
Rolling Budget
It expresses managements operating & financial plans for a sp…
The budgeted income statement and supporting budget schedule.
Explicitly incorporates continuos improvement anticipated dur…
A budget that is always available for a specified future peri…
Master Budget
It expresses managements operating & financial plans for a sp…
Operating Budget
The budgeted income statement and supporting budget schedule.
Chapter 6 Key Terms - Cost Accounting
continuous loss
cost of production report
discrete loss
equivalent units of production (EUP)
any reduction in units that occurs uniformly throughout a pro…
a process costing document that details all operating and cos…
a reduction in units that occurs at a specific point in a pro…
an approximation of the number of whole units of output that…
continuous loss
any reduction in units that occurs uniformly throughout a pro…
cost of production report
a process costing document that details all operating and cos…
19 terms
Managerial Accounting Chapter 6: Cost Behavior
Cost Behavior
Variable Costs
Cost Equation
Fixed Costs
Describes how costs change as volume changes.
Costs that change in total in direct proportion to changes in…
A mathematical equation for a straight line that expresses ho…
Costs that stay constant in total despite wide changes in vol…
Cost Behavior
Describes how costs change as volume changes.
Variable Costs
Costs that change in total in direct proportion to changes in…
Chapter 6 Accounting (Cost Allocation and Activity-Based Costing)
Ability to bear costs
Activity-based costing (ABC)
Activity-based management (ABM)
Cause-and-effect allocation
The notion in cost allocation that the allocation base should…
A method of assigning overhead costs that identifies the key…
A management approach that involves analyzing and costing act…
An allocation of cost to the cost objective that caused it to…
Ability to bear costs
The notion in cost allocation that the allocation base should…
Activity-based costing (ABC)
A method of assigning overhead costs that identifies the key…
20 terms
Cost Accounting Ch 6 Vocab
Activity-based budgeting (ABB)
Budgetary slack
Cash budget
Continuous budget
Budgeting approach that focuses on the budgeted cost of the a…
The practice of underestimating budgeted revenues, or overest…
Schedule of expected cash receipts and disbursements.
Budget or plan that is always available for a specified futur…
Activity-based budgeting (ABB)
Budgeting approach that focuses on the budgeted cost of the a…
Budgetary slack
The practice of underestimating budgeted revenues, or overest…
20 terms
Chapter 6 Accounting- Inventory and Cost of Goods Sold
average cost method
Consignment
cost of goods sold
cost of goods sold model
inventory costing method based on the average cost of invento…
an inventory arrangement where the seller sold inventory that…
cost of inventory the business has sold to customers
brings together all the inventory data for the entire account…
average cost method
inventory costing method based on the average cost of invento…
Consignment
an inventory arrangement where the seller sold inventory that…
6 terms
Accounting Chapter 6: Inventories and Cost of Sales
Specific Identification (SI)
First-In-First-Out
Last-In-First-Out
Weighted Average
The process of identifying a specific purchase and invoice to…
Method of assigning costs to both inventory and cost of goods…
Method of assigning costs assumes that the most recent purcha…
Method of assigning cost requires that the weighted average c…
Specific Identification (SI)
The process of identifying a specific purchase and invoice to…
First-In-First-Out
Method of assigning costs to both inventory and cost of goods…
20 terms
Accounting Chapter 6: Inventory & Cost of Goods Sold
Average-Cost Method (weighted-average…
consignment
cost of goods sold
debit memorandum
Inventory costing method based on the average cost of invento…
An inventory arrangement where the seller sells inventory tha…
Cost of the inventory the business has sold to its customers
A document issued to the seller (vendor) when an item of inve…
Average-Cost Method (weighted-average…
Inventory costing method based on the average cost of invento…
consignment
An inventory arrangement where the seller sells inventory tha…
25 terms
Accounting Chapter 6: Variable costing
Variable costs
Variable Costing Unit product cost
Variable Costing COGS
Total S&A expenses
includes direct materials, direct labor, and variable manufac…
= Direct materials + direct labor + variable MOH... Equivalent…
= variable production cost x units sold
= variable S&A expense per unit sold + fixed S&A expense
Variable costs
includes direct materials, direct labor, and variable manufac…
Variable Costing Unit product cost
= Direct materials + direct labor + variable MOH... Equivalent…
16 terms
Accounting Chapter 6 - Inventories and Cost of Sales
Conservatism Constraint
Consistency Concept
First-In, First-Out (FIFO)
Interim Statements
Principle that prescribes the less optimistic estimate when t…
Principle that prescribes use of the same accounting method(s…
Items are sold in the order acquired; earliest items purchase…
Financial statements covering periods of less than one year;…
Conservatism Constraint
Principle that prescribes the less optimistic estimate when t…
Consistency Concept
Principle that prescribes use of the same accounting method(s…
Cost Accounting - Chapter 1
Financial Accounting
Enterprise Resource Planning (ERP)
Management Accounting
database (or data warehouse or info-ba…
Focuses on reporting to external parties such as investors, g…
Single databases that collect data and feed it into applicati…
Measures, analyzes, and reports financial and non-financial i…
Consists of small, detailed bits of information that can be u…
Financial Accounting
Focuses on reporting to external parties such as investors, g…
Enterprise Resource Planning (ERP)
Single databases that collect data and feed it into applicati…
8 terms
Accounting Chapter 6: Process Costing
equivalent units
production cost report
weighted-average method
FIFO method
the number of the same or similar compete units that could ha…
summarizes the physical units and equivalent units of a depar…
includes both current period and prior period costs in calcul…
includes only costs incurred and work performed during the cu…
equivalent units
the number of the same or similar compete units that could ha…
production cost report
summarizes the physical units and equivalent units of a depar…
13 terms
Accounting II Costing Inventory Chapter 6-1
Adequate Disclosure
Goods in Transit
FOB Shipping Point
FOB Destination
to adequately report the financial progress and condition of…
...
...
...
Adequate Disclosure
to adequately report the financial progress and condition of…
Goods in Transit
...
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