BEC 1

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  1. Name the three components of product cost
    • Direct Materials (DM)
    • Direct Labor (DL)
    • Manufacturing Overhead (MOH)

    • Prime Cost = DM + DL
    • Conversion Costs = DL + MOH
  2. Distinguish between product and period cost
    Product Costs: Inventoriable, they become cost of goods sold when sold

    Period Costs:  Expensed in the period incurred
  3. Define the Traditional Overhead rate
  4. Define relevant range
    The relevant range is the range of volume for which the assumptions of the cost driver (i.e., linear relationship with the costs incurred) are valid and in which the actual value of the cost driver exists
  5. With joint products, what is the treatment of costs incurred before the split-off point?
    Costs incurred before the split-off point are sunk costs, not relevant to further processing decisions. 

    Joint costs are allocated using one of the following methods.

    • Use % of product to total based on a ratio of 
    • 1) Relative Sales Value
    • 2) Net Realizable Value
    • 3) Physical Units
  6. What is the formula for cost of goods manufactured
    • WIP (beginning)
    • Add: Product Costs
    • Less: WIP (ending)
    • Equals: Cost of Goods Manufactured
  7. What is the formula for cost of goods sold?
    Manufacturing Entity:
    Other:
    • Manufacturing Entity
    • Finished Goods (beginning)
    • Add: Cost of Goods Manufactured
    • Less: Finished Goods (ending)
    • Equals: Cost of Goods Sold

    • Other
    • Beginning Inventory
    • Add: Purchases
    • Less: Ending Inventory
    • Equals: Cost of Goods Sold
  8. What is the difference between job and process costing
    Job costing: each unit/batch is unique and easily identifiable costs are determined by each job

    Process costing:  continuous mass-produced identical units are manufactured, and costs are determined by activity/process/department
  9. What is an equivalent unit?
    Used in process costing, equivalent units are fully completed and partially completed units during the period
  10. How are equivalent units and total costs calculated using the FIFO method?
    Equivalent Units = (Beginning WIP * % to be completed) + units started and Completed + (Ending WIP * % completed)

    Total costs = Cost incurred during the current period
  11. How are equivalent units and total cost calculated using the weighted average method?
    Equivalent Units = Units completed + (Ending WIP * % completed)

    Total costs = Costs in beginning WIP + Costs incurred during the current period
  12. Name the types of spoilage and indicate the appropriate accounting treatment
    • Abnormal: Charge to income of the current period
    • Normal: Increase the cost of the product produced
  13. Define Transaction Marketing
    Customers are attracted for the sake of a single sale
  14. Define Interaction-based relationship marketing
    When customers are attracted for the purpose of a sale that serves as the basis for an ongoing relationship
  15. Define database marketing
    Information is gathered on customers and the information from that database is used to segment customers into target markets for a more effective selling effort
  16. Identify three types of compensation generally available
    • 1) Fixed Salary
    • 2) Bonuses
    • 3) Perks

Card Set Information

Author:
 mmsmiles13728
ID:
 254521
Filename:
 BEC 1
Updated:
2013-12-30 01:57:30
Tags:
Cost Measurement Methods Techniques
Folders:

Description:
Cost Measurement Methods and Techniques of BEC
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