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| a sacrafice made, usually measured by the resources given up, to achieve a particular purpose. |
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| Cost incurred when an asset is used up or sold for the purpose of generating revenue. |
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| a cost assigned to goods that were either purchased or manufactured for resale. |
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| In the period of sale, the product costs are recognized as an expense. |
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| Product costs are stored as the cost of inventory until the goods are sold, also known as product cost. |
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| Any cost that is not a product cost. |
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| resources such as raw materials, parts, and components that one can feasibly observe being used to make a specific product. |
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| Cost of compensating employees who transform direct material into a finished product. |
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| Includes all other costs of transforming materials into a finished product, which one cannot feasibly observe being used to make specific products but are necessary for the production process. |
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| Cost includes all materials that either (1) are not a part of the finished product but are necessary to manufacture it or (2) are part of finished product but are insignificant in cost. |
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| cost consists of wages of production employees who do not work directly on the product yet are required for the manufacturing facility's operation. |
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| Extra hourly compensation paid to an employee who works beyond the time normally allowed by regulation or labor contracts. |
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| the time that an employee does not spend productively because of events such as equipment breakdowns or new setups of production runs. |
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| costs incurred to convert direct material into the final product, namely, costs for direct labor and manufacturing overhead. |
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| Direct costs, namely the costs of direct material and direct labor. |
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| include costs such as sales commissions, sales personnel salaries, and the sales departments' building occupancy costs. |
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| costs incurred to manage the organization and provide staff support, including executive and clerical salaries; costs for legal, computing, and accounting services; and building space for administrative personnel. |
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| material that has not yet been entered into production. |
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| Partially completed products |
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| Schedule of Cost of Goods Manufactured and Sold |
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| This report is only for managerial use and rarely appears in external financial statements. It is typically prepared to summerize and report manufacturing costs for managers' use. |
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| Characteristic of an activity or event that causes that activity or event to incur costs. |
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| Any discrete task that an organization undertakes to make or deliver a good or service. |
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| Change in total in proportion to a change in the activity volume. |
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| Remain unchanged in total as the volume of activity changes. |
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| Range of activity over which th company expects to operate and over which assumed cost patterns are reasonably accurate. |
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| Incurred for every unit of product manufactured or service produced. |
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| Incurred for every batch of product or service produced. |
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| Incurred for each line of product or service. |
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| Incurred for specific customers. |
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| Facility-level (general-operations-level) Costs |
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| Incurred to maintain the organization's overall facility and infrastructure. |
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| Cost for which management has taken actions that result in some level of commitment to incur the cost |
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| The forgone benefit that could have been realized from the best alternative use of a resource. |
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| Past payments for resources that cannot be changed by any current or future decision. |
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| A cost object is traceable to that cost object. |
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| A cost of an object is not feasibly traceable to that cost object. |
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| Any entity to which a cost is assigned. |
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| Absorbtion (full) Costing |
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Definition
| Applies all manufacturing overhead costs to manufactured goods along with direct-material and direct-labor costs. |
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| Variable (direct) Costing |
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Definition
| Applies only variable manufacturing overhead to manufacturing goods A product cost along with direct material and direct labor costs. |
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| The amount of sales revenue remaining, after covering all variable costs, to contribute toward covering fixed cost and profit. |
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| Assigns only unit-level spending for direct costs as the cost of products or services. |
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| Measure the use of resources in the production. |
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| Support (service) Departments |
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Definition
| Do not work directly on a product but are necessary for the production process to operate. |
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Definition
| Assigns only actual costs of both direct and indirect resources (i.e. DM, DL, & OH) to products. |
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| The amount of maufacturing overhead actually incurred during an accounting period. |
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| The amount of manufacturing overhead assigned to Work-in-Process Inventory as a product cost. It is calculated by multiplying the predetermined overhead rate by the actual cost driver volume. |
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Definition
| Depicts the stages required to complete a project and the sequence in which the stages are to be performed. |
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| Reports the costs of all production-related resources used on the job to date. |
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| Treats each individual job as the unnit of output and assigns costs to each job as resources are used. |
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| Material Requisition Form |
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Definition
| Source document for the transfer of raw material from the Raw-Material to Work-in-Process Inventory and to the job-cost record for the production job. |
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Term
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Definition
| Assigns to production jobs the cost of actual direct materials, actual direct labor, and applied manufacturing overhead, which are calculated by multiplying the predetermined overhead rate by the actual amount of the cost driver. |
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Definition
| A hybrid of job-order and process costing, which is used when companies produce batches of similar products with significantly different types of material. |
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| Refers to actual overhead that is less than applied overhead. |
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| The difference between the actual and the applied manufacturing overhead amounts. |
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| Predetermined Overhead Rate |
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Definition
| The budgeted manufacturing overhead divided by the budgeted level of the cost driver. |
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Definition
| Treats all units processed during a time period as the output to be costed and does not seperate and record costs for each unit produced. |
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| A system that accumulates the costs of a production process and assigns them to the products that constitue the organization's output. |
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| The process of allocating cost variances to Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold. |
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Definition
| Uses a predetermined rate for both direct and indirect costs (i.e. DM, DL, & OH) to assign manufacturing costs to products. |
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| The average time required to convert raw materials into finished goods. |
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| Refers to actual overhead that exceeds applied overhead. |
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