Term
| Activity-based costing (ABC) |
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Definition
| An accounting framework based on determining the cost of activities and allocating these costs to products using activity rates. |
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Term
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Definition
| The combination of direct labor and factory overhead costs |
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Definition
| Payment of cash (or a commitment to pay cash in the future) for the purpose of generating revenues. |
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Definition
| System used to accumulate manufacturing costs for decision-making and financial reporting purposes. |
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Term
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Definition
| The process of assigning indirect costs to a cost object, such as a job. |
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Term
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Definition
| The cost of the manufactured product sold. |
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Term
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Definition
| Wages of factory workers who are directly involved in converting materials into a finished product. |
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Term
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Definition
| The cost of materials that are an integral part of the finished product. |
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Term
| Electronic data interchange (EDI) |
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Definition
| An information technology that allows different business organizations to use computers to communicate orders, relay information, and make or receive payments. |
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Term
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Definition
| Philosophy that grants employees the responsibility and authority to make their own decisions about their operations. |
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Term
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Definition
| All of the costs of operating the factory except for direct materials and direct labor. |
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Definition
| The cost of finished products on hand that have not been sold. |
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Term
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Definition
| The subsidiary ledger that contains the individual accounts for each kind of commodity or product produced. |
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Term
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Definition
| An account in the work in process subsidiary ledger in which the costs charged to a particular job order are recorded. |
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Term
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Definition
| A type of cost accounting system that provides for a separate record of the cost of each particular quantity of product that passes through the factory. |
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Term
| Just-in-time (JIT) manufacturing |
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Definition
| A business philosophy that focuses on eliminating time, cost, and poor quality within manufacturing processes. |
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Term
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Definition
| The elapsed time between starting a unit of product into the beginning of a process and its completion. |
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Term
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Definition
| The branch of accounting that uses both historical and estimated data in providing information that management uses in conducting daily operations, in planning future operations, and in developing overall business strategies. |
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Term
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Definition
| The cost of materials that have not yet entered into the manufacturing process. |
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Term
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Definition
| The subsidiary ledger containing the individual accounts for each type of material. |
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Term
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Definition
| The form or electronic transmission used by a manufacturing department to authorize the issuance of materials from the storeroom. |
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Term
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Definition
| The time that units wait in inventories, move unnecessarily, and wait during machine breakdowns. |
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Term
| Overapplied factory overhead |
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Definition
| The amount of factory overhead applied in excess of the actual factory overhead costs incurred for production during a period. |
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Term
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Definition
| Those costs that are used up in generating revenue during the current period and that are not involved in the manufacturing process. |
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Term
| Predetermined factory overhead rate |
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Definition
| The rate used to apply factory overhead costs to the goods manufactured. The rate is determined from budgeted overhead cost and estimated activity usage data at the beginning of the fiscal period. |
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Term
| Predetermined factory overhead rate |
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Definition
| The rate used to apply factory overhead costs to the goods manufactured. The rate is determined from budgeted overhead cost and estimated activity usage data at the beginning of the fiscal period. |
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Term
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Definition
| A type of cost accounting system in which costs are accumulated by department or process within a factory. |
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Term
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Definition
| Organizing work in a plant or administrative function around processes (tasks). |
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Term
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Definition
| The three components of manufacturing cost: direct materials, direct labor, and factory overhead costs. |
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Term
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Definition
| Organizing work in a plant or administrative function around products; sometimes referred to as product cells. |
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Term
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Definition
| A just-in-time method wherein customer orders trigger the release of finished goods, which trigger production, which triggers release of materials from suppliers. |
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Term
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Definition
| Materials are released into production and work in process is released into finished goods in anticipation of future sales. |
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Term
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Definition
| The form or electronic transmission used by the receiving personnel to indicate that materials have been received and inspected. |
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Term
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Definition
| The effort required to prepare an operation for a new production run. |
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Term
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Definition
| A just-in-time method that views suppliers as a valuable contributor to the overall success of the business. |
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Term
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Definition
| The form on which the amount of time spent by each employee and the labor cost incurred for each individual job, or for factory overhead, are recorded. |
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Term
| Underapplied factory overhead |
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Definition
| The actual factory overhead costs incurred in excess of the amount of factory overhead applied for production during a period. |
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Term
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Definition
| The time required to manufacture a unit of product or other output. |
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Term
| Work in process inventory |
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Definition
| The direct materials costs, the direct labor costs, and the factory overhead costs that have entered into the manufacturing process but are associated with products that have not been finished. |
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