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Cost Accounting Vocab

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Allocated amount of indirect costs in an accounting period is greater than the actual (incurred) amount in that period.






2. Actual total indirect costs in a cost pool divided by the actual total quantity of the cost-allocation base for that cost pool






3. All costs in the income statement other than cost of goods sold






4. A costing system that traces direct costs to a cost object by using the actual direct-cost rates times the actual quantities of the direct-cost inputs and allocates the indirect costs based on the actual indirect-cost rates times the actual quantitie






5. Restates all overhead entries in the general ledger and subsidiary ledgers using actual cost rates rather than budgeted cost rates






6. A grouping of individual cost items






7. The spreading of underallocated manufacturing overhead or overallocated manufacturing overhead amound ending work in process - finished goods - and cost of goods sold






8. An event - task - or unit of work with a specified purpose






9. All manufacturing costs that are related to the cost object (work in process and then finished goods) but that cannot be traced to that cost object in an economically feasible way.






10. A factor that links in a systematic way an indirect cost or group of indirect costs to a cost object






11. Approach to costing that focuses on individual activities as the fundamental cost objects. It uses costs of these activities as the basis for assigning costs to other cost objects such as products or services






12. The costs of activities that cannot be traced to individual products or services but support the organization as a whole






13. Contribution margin per unit divided by selling price






14. Gross margin divided by revenues






15. The costs of activities related to a group of units of products or services rather than to each individual unit of product or service






16. Companies that provide services or intangible products to their customers






17. Costing system that reduces the use of broad averages for assigning the cost of resources to cost objects (jobs - products - services) and provides better measurement of the costs of indirect resources used by different cost objects- no matter how di






18. Wage rate paid to workers (for both direct labor and indirect labor) in excess of their straight-time wage rates






19. A what-if technique that managers use to examine how an outcome will change if the original predicted data are not achieved or if an underlying assumption changes






20. A variable - such as volume - that casually affects revenues






21. Cost of goods brought to completion - whether they were started before or during the current accounting period






22. Describes the likelihood (or the probability) that each of the mutually exclusive and collectively exhaustive set of events will occur






23. Costing system in which the cost object is masses of identical or similar units of a product or service






24. Costing system in which the cost object is a unit or multiple units of a distinct product or service called a job






25. Cost incurred (a historical or past cost) - as distinguished from a budgeted or forecaster cost






26. Include the compensation of all manufacturing labor that can be traced to the cost object (work in process and then finished goods) in a economically feasible way






27. Allocated amount of indirect costs in an accounting period is less than the actual (incurred) amount in that period.






28. Companies that purchase materials and components and convert them into various finished goods






29. Operating income plus nonoperating revenues (such as interest revenue) minus nonoperating costs (such as interest cost) minus income taxes






30. Budgeted annual indirect costs in a cost pool divided by the budgeted annual quanttity of the cost allocation base






31. A variable - such as the level of activity or volume - that casually affects costs over a given time span






32. Allocated amount of indirect costs in an accounting period is greater than the actual (incurred) amount in that period.






33. Cost that changes in total in proportion to changes in the related level of total activity or volume






34. Source document that records and accumulates all the costs assigned to a specific job - starting when work begins






35. Quantity of output sold at which total revenues equal total costs - that is where the operating income is zero






36. 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






37. Total revenues from operations minus cost of goods sold and operating costs (excluding interest expense and income taxes)






38. Predicted economic results of the various possible combinations of actions and events in a decision model






39. Categorization of indirect costs into different cost pools on the basis of the different types of cost drivers - or cost-allocation bases - or different degrees of difficulty in determinig cause-and-effect (or benefits received) relationships






40. Weighted average of the outcomes of a decision with the probability of each outcome serving as the weight






41. Source documents that contains information about the cost of direct materials used on a specific job and in a specific department






42. Goods completed - but not yet sold






43. A possible relevant occurrence in a decision model






44. Contribution margin per unit divided by selling price






45. Anything for which a measurement of costs is desired






46. Summary of alternative actions - events - outcomes - probabilities of events in a decision model






47. Costing outcome where one undercosted (overcosted) product results in at least one other product being overcosted (undercosted)






48. Effects that fixed costs have on changes in operating income as changes occur in units sold and hence in contribution margin






49. Source document that records and accumulates all the costs assigned to a specific job - starting when work begins






50. Amount of manufacturing overhead costs allocated to individual jobs - products - or services based on the budgeted rate multiplied by the actual quantity used of the cost-allocation base







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