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Managerial Accounting
McGraw Hill Chapters 7-10
28
Accounting
Undergraduate 2
11/02/2011

Additional Accounting Flashcards

 


 

Cards

Term
Cost Hierarchies
Definition

Unit:each time a unit is produced

Batch: each time a batch is handled, regardless of units

Product: specific product, regardless of batches

Customer: specific customers

(i.e. sales calls, mailings, tech)

Organization: carried out regardless of which

customer is served

 

 

Term
activity cost pool
Definition
costs accumulated that relate to a single activity measure
Term
Activity-based costing
Definition
a costing method that is designed to provide managers with cost information for decisions that potentially affect capacity (therefore fixed and variable costs)
Term
activity measure
Definition

an allocation base in an activity-based costing system

 

"cost driver"

 

Transactional and Durational

Term
transactional driver
Definition

count of the number of times an activity occurs

 

(e.g. number of bills, magezines, etc.)

Term
durational driver
Definition

the amount of time it requires to perform an activity

 

(e.g. time spent preparing bills, writing/printing magezines)

Term
Stage 1 Allocation
Definition

assigning functionally organized overhead costs derived from a company's general ledger to the activity cost pools.

 

Assign overhead costs to activity cost pools

Term

Stage 1 Allocation:

Calculating activity rates

Definition

divide total cost of the activity by total activity

 

total cost / overhead cost = activity cost pool

Term
Stage 2 Allocation
Definition

Assign overhaed costs to cost objects (products and customers) based on activity rate

 

acvtivity rate x activity = ABC Cost

Term
Product Margin-ABC
Definition

sales - (direct costs + activity cost pools)=

 

PROFIT MARGIN

Term
Customer margin-ABC
Definition

sales - (direct costs + acvivity costs + Cust relations) =

 

Customer Margin

Term
Planning budget
Definition

based on a planned level of activity

 

variable cost x quantity planned

Term
flexible budget
Definition

Use actual level of activity but with planned costs

 

allow variable costs and revenues to vary

 

Term
activity variance
Definition
Planned budget - Flexible budget= activity variance
Term
Revenue/Spending Variance
Definition
actual - flexible budget = variance
Term
Purchase budget
Definition
use either units or COGS, add desired ending inventory and subtract expected beginning inventory
Term
Production budget
Definition

lists the number of units that must be produces to satisfy sales needs to provide for the desired ending inventory.

 

budgeted unit sales, add desired ending inventory finished goods and subract begining inventory of finished goods

 

(units only)

Term
Cash budget
Definition

cash balance beginning, add receipts and subtract disbursements

 

eqaul to cash available for disbursements

 

if below min balance-borrow

if not-repay outstanding

Term
standard cost
Definition

= flexible budget cost

 

=standard price per unit x standard quantity per unit

=standard rate per hour x standard hours per unit

Term
Direct Material standards
Definition

stdrd price per unit:

reflect the final delivered cost of direct materials

 

stdrd quantity per unit:

reflects the amount of material required to for each unit of finished product as well as an allowance for unavoidable wate. (e.g. waste, spoilage, rejects,etc.)

Term
direct labor standards
Definition

stdrd rate per hour:

includes hourly wages, employment taxes and fringe benefits

 

stdrd hours per unit:

the labor time require to complete a unit of production

Term
total variance (per input)
Definition

=actual cost - standard cost

 

 

Term

materials quanity variance

 

labor efficiency variances

Definition

=(act qt used x stdrd price)-(stdrdqt used x stdrd price)

 

 

=(act hrs x stdrd rate)-(stdrd hrs x stdrd rate)

Term

materials price variance

 

labor rate variance

Definition

=(act qt x act price)-(act qt x stdrd price)

 

 

=(act hrs x act rate)-(act hrs x stdrd rate)

Term
predetermined fixed rate
Definition
=budgeted fixed costs / hours
Term
budget variance
Definition

=act fixed ovrhd - bdgt fixed ovrhd

 

Term
volume variance
Definition
=bdgt fixed ovrhd - (stdrd rate/hr x stdrd hours/unit)
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