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