Busy. Please wait.
or

show password
Forgot Password?

Don't have an account?  Sign up 
or

Username is available taken
show password

why


Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account.
We do not share your email address with others. It is only used to allow you to reset your password. For details read our Privacy Policy and Terms of Service.


Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
Don't know
Know
remaining cards
Save
0:01
To flip the current card, click it or press the Spacebar key.  To move the current card to one of the three colored boxes, click on the box.  You may also press the UP ARROW key to move the card to the "Know" box, the DOWN ARROW key to move the card to the "Don't know" box, or the RIGHT ARROW key to move the card to the Remaining box.  You may also click on the card displayed in any of the three boxes to bring that card back to the center.

Pass complete!

"Know" box contains:
Time elapsed:
Retries:
restart all cards
share
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

C250 C&M Acc

Cost and Managerial Accounting

TermDefinition
Product Costs DM + DL + FOH Inventory, which goes on the Balance Sheet COGS, which goes on the Income Statement
Period Costs Selling Expenses + Administrative Expenses
Total Manufacturing Costs Direct Materials + Direct Labor + Applied Mfg Overhead
Prime Cost Direct Materials + Direct Labor
Conversion Cost Direct Labor + Manufacturing Overhead
Mixed Cost Line Formula Y = a + bX Y = Estimated total manufacturing overhead cost a = Estimated total fixed manufacturing overhead cost b = Estimated variable manufacturing overhead cost per unit of allocation base X = Estimated total amount of allocation base
Traditional Format Income Statement Sales (-) Cost of goods Sold = Gross Margin (-) Selling & Admin Expenses = Net Operating Income
Contribution Format Income Statement Sales Revenue (-) Variable Expenses = Contribution Margin (-) Fixed Expenses = Net Income from Operations
Job Order Cost DM used + DL + Applied MOH
4 Steps To Compute Predetermined Overhead Rate 1. Estimate denominator. Total amount of allocation base 2. Estimate the total fixed manufacturing overhead costs for the coming period. 3. Use Y = a + bX to estimate the total amount of manufacturing overhead 4. Compute the predetermined overhead rate
Predetermined Overhead Rate (POR) Allocates a certain amount of manuf overhead to each direct labor or machine hour Helps companies allocate resources and set pricing Estimated Overhead Costs / Estimated Activity Base
Overhead Applied Overhead expenses that have been applied to units of a product during a specific period POR x Actual Units Of Allocation Base
Under/Over Applied Manufacturing Overhead Actual Manufacturing Overhead - Applied Manufacturing Overhead
Cost of Goods Manufactured (COGM) Beg WIP + DM Used + DL + Applied Manuf Overhead - End WiP
Unadjusted Cost of Goods Sold Beginning Fin Goods Inv + COGM - End Fin Goods Inv
Adjusted COGS Beg Fin Goods Inv + COGM - End Fin Goods Inv +/- Under/Over Applied Manuf Overhead OR COGS +/- Under/Over Applied Manuf Overhead
Ending Finished Goods Inventory Beginning Finished Goods Inventory + COGM - COGS
Gross Margin Sales revenue a company retains after incurring direct costs involved Sales - COGS
Process Costing Steps 1. Calculate Equivalent Units of Purchase 2. Calculate Cost Per Equivalent Units of Purchase 3. Calculate Cost Completed and Transferred Out 4 Calculate Cost of Ending WIP
Equivalent Units Number of partially completed units x % completion
Equivalent units of production (weighted-avg method) Partially completed units expressed in terms of finished goods Units transferred to the next department or to finished goods + equivalent units in ending WIP
Cost per equivalent unit (Weighted-avg method) (Cost of beginning work in process inv + cost added during period) / equivalent units of production
Cost Of Units Completed & Transferred Out Units transferred out of Department x Cost per Equivalent Unit
Cost of Ending WIP Ending WIP Equivalent Units x Cost Per Equivalent Unit
Units Transferred Beg Inventory + Units Started - Ending Inventory
Costs To Be Accounted For Beginning work in process inv + cost added during the period
Costs Accounted For Costs of Units Transferred Out + Ending WIP
Contribution Margin per Unit (CMU) Incremental money generated for each product/unit sold after deducting the variable portion Sales Price per Unit - Variable Cost per Unit
Contribution Margin Per Unit of Constrained Resource CM Per Unit / Amount Required To Produce 1 Unit
Variable Cost Per Unit Production cost for each unit produced that is affected by changes in a firm's output or activity level (Materials + Labor + Variable Costs) / Number of Units
Relevant Cost To Make Avoidable costs that are incurred only when making specific decisions Variable Costs + Avoidable Fixed Costs
Segment Margin Amount of net profit or net loss generated by a portion of a business Contribution Margin [(sales revenue - variable costs)] - Avoidable Costs + Keep - Lose
Incremental profit Profit gain or loss associated with a given managerial decision Incremental Revenue - Incremental Processing Costs + Process Further - Sell It
Budgeted Production How much to produce to reach desired sales Budgeted Sales + Desired End Inventory - Beg Inventory
Budgeted Sales in Units Revenue / Selling Price Per Unit
Net Income Sales Revenue - COGS - Selling and Administrative Expenses
Net Operating Income or Profit Sales - Variable Expenses - Fixed Expenses OR (CM Ratio x Sales) - Fixed Expenses
Break-Even Point in Dollars (BEP $) Fixed Costs / Overall CM Ratio CMR = Total CM / Total Sales
Break-Even Point in Units (BEP Units) Fixed Expenses / CMU CMU = Selling Price Per Unit - Variable Cost Per Unit
Contribution Margin Ratio Difference between a company's sales and variable costs, expressed as a percentage Sales Price per Unit - Variable Cost per Unit
Change In Contribution Margin CM Ratio x Change In Sales
Unit Sales to Attain Target Profit (Target Profit + Fixed Expenses) / Unit CM
Dollar Sales to Attain Target Profit (Target Profit + Fixed Expenses) / CM Ratio
Margin of Safety (MS) MS $ / Total Budgeted (or Actual) Sales in Dollars
Margin of Safety in Dollars (MS $) Total Budgeted (or Actual) Sales - Break Even Sales,
Margin of Safety Percentage (Budgeted Sales - Break-Even Sales) / Budgeted Sales
Contribution Margin Sales Revenue - Variable Costs OR CM Ratio x Sales
Degree of Operating Leverage (DOL) Measures how much the OI will change in response to change in sales Contribution Margin / Net Operating Income
Percentage Change in Net Operating Income (%∆ NOI) DOL x Percentage Change in Sales
Overall CM Ratio Shows CM as a percentage of each dollar of sales Total CM / Total Sales
Profit or Net Operating Income (from Units) (Unit CM x Qty of Units) - Fixed Expenses
Profit or Net Operating Income (from CM Ratio) (CM Ratio x Sales) - Fixed Expenses
Materials Price Variance Difference between the actual cost of direct materials and the standard cost of quantity purchased or consumed AQ(AP - SP)
Materials quantity variance Difference between actual amount of materials used and amount that was expected SP x (AQ - SQ)
Labor Rate Variance (LRV) Difference between actual cost of DL and Standard cost AH x (AR - SR)
Labor Efficiency Variance (LEV) Difference between actual hours worked and budgeted hours that should have been worked based on standards. Budgeted vs. Actual SR x (AH - SH)
Variable Overhead Efficiency Variance Difference between actual hours worked at standard rate and standard hours allowed at standard rate SR x (AH - SH)
Variable Overhead Rate Variance Difference between actual variable manuf. overhead and the variable overhead that was expected given number of hours worked AQ x (AR - SR)
Variable Overhead Rate AH x (SP - AP)
Standard quantity allowed for actual output Actual Output x Standard Quantity
Return on Investment (ROI) Measures if the gains compare favorably to the costs Net Operating Income / Average Operating Assets OR Margin / Turnover Margin = Net Operating Income / Sales Turnover = Sales / Average Operating Assets
Margin Measures profitability Net Operating Income / Sales
Residual Income (RI) NI after all costs are paid down. Amount of profit that exceeds its required rate of return Net Operating Income - (Average Operating Assets x Minimum Required Rate of Return)
Turnover How much operating profit is being produced for each dollar of sales Sales / Average Operating Assets
Throughput Time (Mfg Cycle) Time it takes for a product to be produced (does not include Wait Time) Process Time + Inspection Time + Move Time + Queue Time
Delivery Cycle Time Time span of acceptance of an order to delivery Throughput Time + Wait Time
Manufacturing cycle efficiency (MCE) Measures the proportion of production time spent on value-added activities Value-Added Time (Process Time) / Throughput (Manufacturing Cycle) Time OR Process Time / Manufacturing Cycle
Variable vs. Absorption Costing VC = Cost of unit only includes the variable manuf. costs AC = Cost of unit includes variable manuf. costs AND fixed manuf. costs VC = Fixed is shown as Expense on IS AC = Fixed is in the calculation
Absorption Cost Per Unit VC Per Unit + (Fixed Costs / Units Produced)
Activity Variance Measures actual vs. planned of an item or activity Flexible Budget - Planning Budget
Revenue and spending variances Measures differences between actual and expected Actual Results - Flexible Budget
Flexible budget Cost + (Unit Price x Actual Level of Activity)
Planning budget cost + (unit price x planned level of activity)
Flex Budget > Plan Budget Actual Revenue > Flex Budget Actual Expense > Flex Budget Unfavorable Favorable Unfavorable
Variable Expense Ratio Variable Expenses / Sales
Break Even Analysis - Equation Method Profit = Unit CM x quantity sold - Fixed expenses
High-Low Method of Analysis 1. (Highest Costs - Lowest Costs) / (Qty of Highest Costs - Qty of Lowest Costs) 2. Answer from 1 x Total Cost = Variable Cost Element 3. Total Cost - Variable Cost Element
4 Sections of the Cash Budget Cash Receipts Cash Disbursements Cash in Excess or deficiency Financing Section
Excess (deficiency) of cash available over disbursements Beginning cash balance + cash receipts - cash disbursements
Cost Center A segment whose manager has control over costs, but not over revenues or investment funds.
Profit Center a business segment whose manager has control over cost and revenue but has no control over investments in operating assets
Investment Center A segment whose manager has control over costs, revenues, and investments in operating assets.
Created by: cnmeastman