Term
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Definition
| costs are accumulated by costing |
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Term
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Definition
| one distinct unit or set of units |
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Term
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Definition
| only actual costs of DM, DL, and overhead are used to determine unit cost |
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Term
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Definition
| determines unit cost by adding actual DM, DL and estimated overhead (use predetermined overhead rate) |
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Term
| steps to estimate overhead |
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Definition
1) calculate predetermined overhead rate
2) apply overhead to production throughout the year
3) reconcile the difference between the total actual overhead incurred during the year and total overhead applied to production |
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Term
| predetermined overhead rate |
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Definition
| is calculated at the beginning of the year by dividing the total estimated annual overhead by the total estimated level of the associated activity or cost driver |
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Term
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Definition
| is found by multiplying the predetermined overhead rate by the actual use of the associated activity for the period |
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Term
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Definition
| the difference between actual overhead and applied overhead |
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Term
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Definition
| actual overhead>applied overhead |
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Term
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Definition
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Term
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Definition
| is a single overhead rate calculated by using all estimated overhead for a factory divided by the estimated activity level across the entire factory |
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Term
| departmental overhead rate |
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Definition
| simply estimated overhead for a department divided by the estimated activity level for that same department |
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Term
| normal cost of goods sold |
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Definition
| the cost of goods sold before before an adjustment for an overhead variance is rate |
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Term
| adjusted cost of goods sold |
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Definition
| the cost of goods sold after the adjustment for the periods overhead variance takes place |
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Term
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Definition
| requires that the units pass through one process before they can be worked on in later processes |
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Term
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Definition
| is another processing pattern that requires two or more sequential processes to produce a finished good |
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Term
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Definition
| are costs transferred from a prior process to a subsequent process |
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Term
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Definition
| is the document that summarizes the manufacturing activity that takes in a process department for a given period of time |
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Term
| equivalent units of output |
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Definition
| are the complete units that could have been produced given the total amount of manufacturing effort expended for the period under consideration |
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Term
| weighted average costing method |
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Definition
| combines beginning inventory costs and work done with current period costs and work to calculate this periods unit costs |
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Term
| steps in a production report |
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Definition
1) physical flow analysis
2) calculation of equivalent
3) computation of unit cost
4) valuation of inventories (goods transferred out and EWIP)
5) cost reconciliation |
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Term
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Definition
| activities that are performed each time a unit is produced |
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Term
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Definition
| activities that are not performed each time a unit of product is produced. factors that measure the consumption of nonunit level activities by products and other cost objects |
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Term
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Definition
1) unit level
2) batch level
3) product sustaining
4) facility sustaining |
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Term
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Definition
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Term
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Definition
| vary with the number of groups or batched that are run |
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Term
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Definition
| vary with the diversity of the product or service line |
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Term
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Definition
| do not vary with any factor but are necessary in operating the plant |
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Term
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Definition
| the proportion of each activity consumed by a product |
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Term
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Definition
| are the resources consumed by the activity in producing its output |
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Term
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Definition
| is the result or product of an activity |
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Term
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Definition
| is the number of times the activity is performed |
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Term
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Definition
| assigns all manufacturing costs to the product. DM, DL, variable overhead and fixed overhead |
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Term
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Definition
| assigns only variable manufacturing costs. DM, DL, variable overhead |
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Term
| if more is sold than produced |
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Definition
| variable costing is greater than absorption costing income |
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Term
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Definition
| are fixed expenses that are directly traceable to a segment. sometimes known as avoidable |
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Term
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Definition
| are jointly caused by 2 or more segments. these expenses persist even if one of the segments to which they are common |
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Term
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Definition
| the profit contribution each segment makes toward covering a firms common costs |
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Term
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Definition
| are the costs of placing and receiving an order |
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Term
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Definition
| are the costs of keeping and storing inventroy |
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Term
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Definition
| costs that occur if demand is uncertain. it is the costs of not having a product available when demanded by a customer or the cost of not having a raw material available when needed for production |
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Term
| total inventory related cost |
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Definition
| ordering cost + carrying cost |
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Term
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Definition
| number of orders per year * cost of placing 1 order |
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Term
| average number of units in inventory |
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Definition
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Term
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Definition
| avg number of units in inventory * cost of carrying one unit in inventory |
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Term
| economic order quantity (EOQ) |
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Definition
| the number of units in the optimal size order quantity |
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Term
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Definition
sqrt(2*CO*(D/CC))
CO: the cost of placing one order
D: the annual demand for the item in units
CC: the cost of carrying one unit in inventory for a year |
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Term
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Definition
is the point in time when a new order should be produced
= rate of usage * lead time |
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Term
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Definition
| is the time required to receive the economic order quantity once an order is placed or a setup is started |
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Term
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Definition
is the extra inventory carried to serve as insurance against changes in demand
= (max daily usage - avg daily usage)*lead time |
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Term
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Definition
| maintains that goods should be pulled through the system by present demand rather than being pushed through on a fixed schedule based on anticipated demand |
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