Overhead Mfg Overhead Work in Process Work in Process Finished Goods Finished

Overhead mfg overhead work in process work in process

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Overhead Mfg. Overhead Work-in- Process Work-in- Process Finished Goods Finished Goods Cost-of Goods Sold Cost-of Goods Sold Cost of Goods Sold Cost of Goods Sold Nonmanufacturing Expenses Nonmanufacturing Expenses Sales - = Gross Margin - Net Income = Income Statement Sold P r o d u c t C o s t s Period Costs Goal: Accurately costed products Timeliness is critical
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Variance Analysis: General Description Actual Quantity of Input at Actual Price AQ x AP Actual Quantity of Input at Standard Price AQ x SP Standard Quantity of Input at Standard Price SQ x SP Price Variance AQ x (AP - SP) Usage Variance SP x (AQ - SQ) Budget Variance (AQ x AP) - (SQ x SP)
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Mgmt. Acct. Cost Accumulation
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Cost Accounting Systems Product Costs Job-Order Costing Process Costing Total/Unit Cost
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Process Costing . . . Homogeneous products continuously produced. Costs accumulated by process (time). Unit cost = total cost for period divided by number of units produced.
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Cost Flows in a Manufacturing Firm Cost Flows in a Manufacturing Firm Direct Materials Direct Materials Direct Labor Direct Labor Mfg. Overhead Mfg. Overhead Work-in- Process Work-in- Process Finished Goods Finished Goods Cost-of Goods Sold Cost-of Goods Sold
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Process Costing System DM DL MOH Process B Process A Finished Goods Cost of Goods Sold Process C
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Job-Order Costing . . . Wide variety of distinct products. Costs accumulated by job. Unit cost = total cost of job divided by number of units produced.
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Job-Order Costing DM DL MOH Job 100 Job 101 Job 102 Finished Goods Cost of Goods Sold Cost of Goods Sold Work in Process Finished Goods
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Mgmt. Acct. Cost Assignment
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Assigning Manufacturing Costs Functional Based Costing Activity Based Costing
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Mgmt. Acct. Good! Cost Behavior!
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Cost Behavior Variable Costs Fixed Costs Mixed Costs
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Variable Costs
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Variable Costs Total costs that vary in direct proportion to changes in the level of activity within the relevant range.
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$ Volume (Activity Base) Total Variable Costs
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$ Volume (Activity Base) Per Unit Variable Cost
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Step-Variable Costs
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But different between ranges of activity $ Volume (Activity Base) Step Costs are constant within a range of activity Step Variable Costs
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Fixed Costs
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