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Acctcy 2037
Accounting Exam 1
54
Accounting
Undergraduate 2
02/20/2012

Additional Accounting Flashcards

 


 

Cards

Term
relevant costs and revenues
Definition
future costs and revenues that will change as a result of a decision
Term
incremental costs
Definition
cost increases resulting from a higher volume of activity or from the performance of an additional activity
Term
avoidable costs
Definition
costs that a company must incur to perform an activity at a given level, but that it can avoid if the company reduces or discontinues the activity (wal-mart implements packing and shipping)
Term
opportunity costs
Definition
profits that a company forgoes by following a particular course of action
Term
sunk costs
Definition
irrelevant costs since they've already happened. can't change the past.
Term
cost accounting
Definition
the process of determining and accumulating the costs of products and activities within a company.
Term
job order
Definition
when a company manufactures one unit of a unique product or manufactures a unique group of products, it treats it as a...
Term
job order cost accounting system
Definition
keeps track of the costs applies to each job order
Term
predetermined overhead rate
Definition
year's budgeted factory overhead cost
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budgeted total volume of manufacturing activity
Term
process cost accounting system
Definition
keeps track of the costs applied to a product as it moves through one or more manufacturing processes
Term
conversion costs
Definition
direct labor and factory overhead costs necessary to convert direct materials into a finished product
Term
equivalent units
Definition
when physical products in a process are counted using a process cost accounting system
Term
average cost method
Definition
assigns the total costs of direct materials and conversion separately to products
Term
standard costs
Definition
costs that a company should incur in performing an activity
Term
standard cost system
Definition
assigns standard costs rather than actual costs to each of its inventory accounts
Term
inventory accounts
Definition
raw materials,goods-in-process inventory, and finished goods inventory
Term
price standard
Definition
the cost that a company should incur to acquire one unit of input for a manufacturing process
Term
quantity standard
Definition
the number of units of an input that a company should use to produce one unit of product output
Term
direct materials price standard
Definition
shows the cost that a company should incur to acquire one unit of a direct material for production
Term
direct materials quantity standard
Definition
shows the amount of a direct material that a company should use to produce one unit of a product
Term
direct materials price variance
Definition
what a company should have spent - what a company spent
Term
standard direct materials quantity budgeted
Definition
amount of direct materials that should be used for the company's actual production level
Term
direct materials quantity variance
Definition
standard cost of direct materials that should have been used - standard cost of direct materials that were used
Term
unfavorable variance
Definition
added to the variance account
Term
favorable variance
Definition
subtracted from variance account
Term
direct labor price standard
Definition
shows the current wage rate that a company should incur per hour for a specific type of direct labor employed in production
Term
direct labor quantity standard
Definition
amount of direct labor time that a company should use to produce one unit of product
Term
direct labor price variance
Definition
cost that should have been incurred for hours worked - cost that actually was incurred
Term
standard direct labor hours budgeted
Definition
the number of direct labor hours that should be used for the company's actual production level
Term
direct labor efficiency variance
Definition
standard cost of the direct labor hours that a company should have used - cost of hours it actually used
Term
normal activity
Definition
average of the company's expected annual production volumes, usually computed for 3-5 years into the future
Term
practical capacity
Definition
volume of activity at which the company's manufacturing facilities are capable of operating per year under practical conditions
Term
total overhead variance
Definition
difference between total factory overhead cost applied and what was actually incurred
Term
overhead budget variance
Definition
difference between the total overhead budgeted and total actual overhead incurred.
Term
fixed overhead volume variance
Definition
difference between amount of applied fixed overhead and amount of budgeted fixed overhead
Term
balanced scorecard
Definition
using company's past AND future activities to help move the company towards its goals
Term
strategic objectives
Definition
financial, customer-related, internal business processes, and innovation & learning
Term
total quality management
Definition
approach that focuses on a company's customers
Term
external failure costs
Definition
costs of flaws in products that reach the customers
Term
prevention costs
Definition
costs of preventing flaws and defects
Term
appraisal costs
Definition
cost of catching product defects inside the company
Term
internal failure costs
Definition
cost of reworking, replacement, and time that a factory is "down" while employees trace and fix defects
Term
push-through production
Definition
production process in a traditional factory
Term
just-in-time strategies
Definition
strategy used to minimize inventories
Term
pull-through production
Definition
production in a JIT factory
Term
back-flush costing
Definition
used in a JIT factory with the costs of products still on hand
Term
product defect rates
Definition
the percentage of defective products manufactured
Term
flexible manufacturing systems
Definition
computerized networks of automated equipment that use software to control machine setups, direct materials selection, and product assembly
Term
activity pool
Definition
grouping of related activities
Term
cost drivers
Definition
activities on which the company bases the activity pools since they drive the overhead costs
Term
activity-based management
Definition
involves managing a company's activities to increase its customers' satisfaction and to increase its profits
Term
activity-based costing (ABC)
Definition
system which allocates factory overhead to units of product
Term
direct materials price variance
Definition
AQ(SP-AP)
Term
direct materials quantity variance
Definition
SP(SQ-AQ)
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