Prelim Sheet_StudyGuide

Prelim Sheet_StudyGuide - Profit=Total Revenue Total Cost =...

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Profit =Total Revenue- Total Cost = P x Q – (VC x Q + FC) = Q (P-VC) – FC Ch.2 Cost Terms Actual Cost- cost incurred as distinguished from budget. Inventory—Direct Materials Inventory- Direct materials in stock and awaiting use in the manufacturing processs Work-In Progress - Goods partially worked on but not done. Finished Goods Inventory- goods done but not sold. Inventoriable Costs- All product costs that are regarded as assets when incurred and become cost of goods sold when product is sold. Period Costs- all costs on Income. Stment that arent cost goods sold. Indirect Labor -supervision,quality control,inspection,purchasing,receiving,and other manufacturing support costs. Direct Materials- cost of materials in product minus purchase discounts, plus freight+allowance for scrap. Indirect Materials/Manufacturing Costs -materials used in manuf that arent part of finished prod-manufacturing overhead costs, factory overhead costs Direct Manufacturing Labor Costs- wages of all manuf labor that can be traced back economically. Wages, fringe benefits paid to machine operators. Factors Affecting Ind/Dir- Materiality/Largeness of cost, Information-Gathering technology,Design of Operations. Cost Driver- any factor that can change the total cost of cost object. Cost Reduction Focus- Value-added activities, Efficient mgmt of cost drivers. Relevant Range- the band of normal Prime Costs = Direct Materials+Direct Labor Conversion Costs = Direct Labor+Overhead Overtime Premium- wage rate paid to workers in excess of their straight-time wage rates-usually considered part indirect costs or overhead. Idle Time- wages paid for unproductive time caused by lack of orders,machine breakdowns etc. Product Cost-
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Prelim Sheet_StudyGuide - Profit=Total Revenue Total Cost =...

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