Term
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Definition
| In financial accounting terms, the cost associated with getting products and services ready for sale |
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Term
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Definition
| Revenue minus product cost (cogs) |
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Term
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Definition
| Cost that do not directly relate to preparing a service or good to be sold. They are subtracted from gross margin |
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Term
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Definition
Revenue
-Cost of providing G N S
=Gross Margin
-Management salaries, marketing, admin
=Profit before taxes |
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Term
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Definition
| products that are not tangible or can be stored. |
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Term
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Definition
| buy goods from suppliers and resell substantially the same product. This creates an inventory account |
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Term
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Definition
Cost of Beginning Inventory
+Cost of goods purchased during the period
-Cost of ending Inventory
=Cost of goods sold during period |
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Term
| Two methods for cost flow with inventory |
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Definition
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Term
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Definition
| Use labor and equipment to transform inputs such as raw materials and components into outputs |
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Term
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Definition
| total of all indirect manufacturing inputs. can be variable and fixed |
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Term
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Definition
| the sum of materials and labor cost |
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Term
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Definition
| sum of their variable and fixed overhead |
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Term
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Definition
| Sum of overhead and labor |
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Term
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Definition
| Cost of goods manufactured. The price of the goods moved from WIP to FG |
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Term
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Definition
| procedure that allocates or distributes a common cost. |
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Term
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Definition
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Term
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Definition
| The items or entities to which we allocate the costs in the cost pool |
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Term
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Definition
| attributes that we can measure for each cost object. also known as allocation basis. |
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Term
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Definition
| sum of the cost driver amounts across all cost objects. the amount of things the cost is being allocated to |
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Term
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Definition
| if there are $60 to be allocated by 5 people you divide 60/5. 12 |
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Term
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Definition
| To do this you multiple the allocation rate by the number of allocated drivers |
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Term
| Be Careful When Using Allocation |
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Definition
| Make sure to remember although allocation appears to be a variable cost, it is actually fixed. Therefore when making decisions do not count it as variable |
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