expensing method where both variable manufacturing expenses and fixed manufacturing expenses are considered as inventory expenses. It is used to show inventory valuation that is reported on the balance sheet.
time period covered by financial statements, such as monthly, quarterly, semiannual, or annual statements
standard unit that provides the system for the way overhead costs of a product or service are divided
expenses necessary to transform raw material to a finished product, generally equal to direct labor cost plus manufacturing overhead
amount spent to produce a product from start through completion and entry into finished goods inventory
total money spent to purchase or produce the products that were sold during an accounting period
method a company uses to track expenses and thereby calculate the cost of its products or services
raw goods that can be traced directly to, or easily identified with, a specific product
expense of operating a company for a specific period of time that remains unchanged despite changes in the company's activity level
rules and standards adopted by the Securities and Exchange Commission that companies must follow when reporting financial information
materials used in a production process that cannot easily be traced to a product. The company applies them to the product by including them as part of overhead costs.
system that companies use when they can trace costs to a specific product or service
result of the overhead costs applied to work in process (WIP) inventory being higher than the actual costs
overhead costs that are assigned to a product based on a predetermined rate or other formula
estimated ratio established before an accounting period begins and used to allocate costs involved in producing goods or services. The accountant calculates it by dividing the estimated manufacturing overhead costs for the accounting period by the allocation base.
system used when large quantities of similar products are manufactured and expenses are applied to a series of actions instead of an individual product
result of the overhead costs applied to work in process (WIP) inventory being less than the actual costs
method in which all fluctuating expenses from manufacturing are considered as part of inventory expenses
means of keeping track of products that have started through production but are not yet complete