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Cost Acct. Ch. 5 Def
| Term | Definition |
|---|---|
| abnormal loss | decretion or spoilage of units in excess of that expected during a production process; the expectation is set by management |
| cost-plus contract | a contract in which the customer agrees to reimburse the producer for the cost of the job plus a specified profit margin over cost |
| defect | a unit that, although rejected at inspection for failure to meet appropriate quality standards or designated product specifications, can be reworked and sold |
| employee time sheet | a source document that indicates, for each employee, what jobs were worked on during a time period and for what amount of time |
| intranet | a mechanism for sharing information and delivering data from corporate databases to the local-area network (LAN) desktops |
| job | a single unit or group of units identifiable as being produced for a specific customer |
| job order cost sheet | a source document that provides virtually all the financial information about a particular job; the set of all job order cost sheets for uncompleted jobs composes the Work in Process Inventory subsidiary ledger |
| job order costing system | a method of product costing used by an entity that provides limited quantities of products or services unique to a customer’s needs; focus of recordkeeping is on individual jobs |
| material requisition form | a source document that indicates the types and quantities of material to be placed into production or used in performing a service; causes material to be released from the raw material inventory warehouse and sent to the production center as well as the c |
| normal loss | an expected decline in units experienced during the production process; the expectation is set by management |
| process costing system | a method of accumulating and assigning costs to units of production in companies producing large quantities of homogeneous products; accumulates costs by cost component in each production department and assigns costs to units using equivalent units of pro |
| shrinkage | a decrease in units arising from an inherent characteristic of the production process; includes decreases caused by evaporation, leakage, and oxidation |
| spoilage | a unit that has been rejected at inspection for failure to meet appropriate quality standards or designated product specifications and that cannot be reworked and sold |
| standard cost system | a valuation method that uses predetermined norms for direct material, direct labor, and overhead to assign costs to the various inventory accounts and Cost of Goods Sold |
| variance | a difference between an actual and a standard or budgeted cost; is favorable if actual is less than standard and is unfavorable if actual is greater than standard |
Created by:
sfrase
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