Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
Managerial PT2
| Term | Definition |
|---|---|
| Total MOH / Total DL$ | Plant-wide POHR based on DL$ |
| Assembly Dept $ / MH in Assembly | Assembly dept. allocation rate for departmental overhead |
| Packaging Dept $ / DL$ in Packaging | Packaging Dept. allocation rate for departmental overhead |
| Plant wide MOH allocation | Good for firms that make only one product. also good for products that use dept. MOH resources similarly |
| Departmental MOH | Better for products that use dept. MOH resources differently |
| Activity based costing | Best for firms that make a wide variety of products that consume MOH in different ways |
| Target Price | Market sets the price |
| Cost-based pricing | firm sets the price |
| Just in Time (JIT) manufacturing | Demand pull, reduces costs to carry inventory, simplifies bookkeeping |
| JIT Management | Good are made when a customer orders, little or no inventory on hand, Raw materials ordered when needed, flexible workforce, Goods shipped when completed, DL & MOH treated as Conversion Cost |
| Traditional manufacturing | supply push |
| Conformance costs | cost to ensure quality |
| Non-Conformance Cost | cost of poor quality |
| Prevention cost | conformance cost Before Production (Quality training & Machine inspections) |
| Appraisal costs | conformance cost During Production (Materials inspections & Product testing) |
| Internal failure costs | non-conformance cost on defects before sale (Scrapped units & rework of defective units) |
| External failure costs | non-conformance cost on defects after sale (customer complaints, warranty repairs, lost sales) |
| Variable Cost per Unit & Total Fixed Cost | Stays the same as the activity level Grows |
| Total Variable Cost | Grows as the activity level grows |
| Fixed Cost per unit | Drops as activity level grows |
| Mixed Cost | Have both fixed and variable components |
| Relevant Range | Range of activities where total FC and VC/unit remain constant. Approximately a straight line |
| Slope | (High cost - low cost) / (High activity - low activity) |
| Total CM | Total Sales - Total VC= |
| CM/Unit | Sales/unit - VC/unit = |
| CM Ratio | CM/unit by Sales/unit= CM / Sales= |
| Profit | Sales - VC - FC = |
| Sales in units (Contribution Margin Approach) | (FC + PRofit) / CM per Unit = |
| Sales in Dollars (Contribution Margin ratio approach) | (FC + Profit) / CM per unit |
| Break Even | (FC + 0) / CM per unit = |
| Break Even in Dollars | break even units X sales price per unit |
| Margin of safety in units | expected units - break even units = |
| Margin of safety in dollars | safety units X sale price per unit = |
| Margin of safety ratio | Margin of safety / Expected Units Sold = |
| Gross Profit | Sales Revenue - COGS |
| Operating Income | Gross Profit - Sales and Adminstraive |
| Variable Costing | Used for internal decision making |
| Contribution Margin | Sales - All VC |
| Operating Income | CM - all FC |
| Manufacturing cost for Absorbing Costing | Items sold X variable cost per unit + Fixed Overhead Cost = |
| Manufacturing cost for Variable Costing | variable cost per unit |
| Ending inventory for Absorption costing | Manufacturing cost per unit X leftover units |
| Ending inventory for Variable Costing | Variable Cost per unit X leftover units |
| Variable Costing | Operating income always remains the same under this costing method within the Income statement |
| Absorption and Variable Costing | Whenever the # we make and sell are same, operating income will be same under |
| Absorption Costing | Used for external reporting |
Created by:
normh80
Popular Accounting sets