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Define Cost Accounting
The process of collecting information for reporting the costs related to producing products or services.
Define Direct Materials
Materials that are of significant value in the cost of a finished product and that become an identifiable part of the product.
Define Direct Labor
The salary of a factory worker who makes a product.
Define Factory Overhead
All expenses other than direct materials and direct labor that apply to making products.
Define Indirect Materials
Materials used in the completion of a product that are of insignificant value to justify accounting for seperately.
Define Indirect Labor
Salaries paid to factory workers who are not actually making products.
Define Job-order Costing
Cost accounting system in which materials, direct labor, and factory overhead are charged to a specific job, shop, or customer order.
Define Cost Sheet
Form used to summarize the direct materials, direct labor, and factory overhead for a specific manufacturing job.
Define Process Costing
Cost accounting system in which costs are accumulated by departments or production processes for products that are manufactured on a continuous basis.
Define Conversion Costs
The combined direct labor and applied factory overhead costs used in a process costing system.
Define Equivalent Units
The number of finished units represented by the total processing in a specific period.
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