Managerial Accounting Chapter 2

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Managerial Accounting Chapter 2
2014-09-08 12:33:06
Managerial Accounting

Chapter 2
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  1. Allocate
    To assign an indirect cost to a cost object
  2. Assign
    To attach a cost to a cost object
  3. Average cost
    The total cost divided by the number of units
  4. Biomicry
    A means of product design in which a company tries to mimic, or copy, the natural biological process in which dead organisms (plants and animals) become the input for another organism or process
  5. Controllable Costs
    Costs that can be influenced or changed by management
  6. Conversion Costs
    The combination of direct labor and manufacturing overhead costs
  7. Cost Object
    Anything for which managers want a separate measurement of costs
  8. Cost of Goods Manufactured
    The cost of manufacturing the goods that were finished during the period
  9. Customer Service
    Support provided for customers after the sale
  10. Design
    Detailed engineering of products and services and the processes for producing them
  11. Differential Cost
    The difference in cost between two alternative courses of action
  12. Direct Cost
    A cost that can be traced to a cost object
  13. Direct Labor
    The cost of compensating employees who physically convert raw materials into the company's products; labor costs that are directly traceable to the finished product
  14. Direct Materials
    Primary raw materials that become a physical part of a finished product and whose costs are traceable to the finished product.
  15. Distribution
    Delivery of products or services to customers
  16. Finished Goods Inventory
    Completed goods that have not yet been sold
  17. Fixed Costs
    Costs that stay constant in total despite wide changes in volume.
  18. Greenwashing
    The unfortunate practice of overstating a company's commitment to sustainability
  19. Indirect Cost
    Labor costs that are difficult to trace to specific products
  20. Inventoriable Product Costs
    All costs of a product that GAAP requires companies to treat as an asset (inventory) for external financial reporting.  These costs are not expensed until the product is sold
  21. Life cycle assessment
    A method of product design in which the company analyzes the environmental impact of a product, from cradle to grave, in an attempt to minimize negative environmental consequences throughout the entire life span of the product
  22. Manufacturing Company
    A company that uses labor, plant, and equipment to convert raw materials into new finished products
  23. Manufacturing Overhead
    All manufacturing costs other than direct materials and direct labor; also called factory overhead and indirect manufacturing cost
  24. Marginal Cost
    The cost of producing one more unit
  25. Marketing
    Promotion and advertising of products or services
  26. Merchandising Company
    A company that resells tangible products previously bought from suppliers
  27. Other Indirect Manufacturing Costs
    All manufacturing overhead costs aside from indirect materials and indirect labor
  28. Period Costs
    Costs that are expensed in the period in which they are incurred; often called Operating Expenses, or Selling, General, and Administrative Expenses
  29. Value Chain (Activities of CFTs)
    The activities that add value to a firm's' products and services; includes R&D, design, production or purchases, marketing, distribution, and customer service.