Cost Accounting Equations
Terms
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- Cost of goods sold
-
Cost of Goods Sold=
Beg Finished goods+
COGM-End Finished goods=COGS - Operating income
- Revenues-COGS-Operating costs (except interest and income tax)
- when costs are incurred in the factory they are
- manufacturing overhead costs
- when costs are incurred in marketing or outside the factory they are
- period costs
- costs that are all direct manufacturing costs
- prime costs
- direct manufacturing labor costs + direct material costs
- prime costs
- the greater the proportion of prime costs the more certain manufactures can be about accuracy of ___________
- costs of products
- all manufacturing costs other than direct materials
- conversion costs
- labor that can be traced to individual products
- direct manufacturing labor
-
indirect labor
managers salaries
payroll fringe costs
are examples of - Manufacturing overhead
- all manufacturing labor compensation other than for direct manufacturing labor and managers salaries is usually classified as
- indirect labor costs
- overtime premium is usually considered a __________- or _________
-
indirect cost or
overhead - a rush job premium is overtime that is a ________ cost of that job
- direct
- idle time is considered a ________ cost
- indirect
- Cost of goods manufactured
-
Beg DM+ Purch DM=
DIrect materials available-Ending DM=Direct materials used+Direct labor+indirect manufacturing costs=Manufacturing costs incurred+Beginning WIP=Total manufacturing cost to account for-ending work in process=COGM - assignment of indirect costs to a particular cost object
- cost allocation
- collection of cost data in some organized way by means of an accounting system
- cost accumulation
- general term that encompasses both 1)tracing accumulated costs that have a direct relationship to a cost object and 2)allocating accumulated costs that have an indirect relationship to a cost object
- cost assignment
- describes the assignment of direct costs to a particular cost object
- cost tracing
- Gross margin =
- Revenues - Cost of Goods sold