What is Cost Accounting and Its Relevant Steps Flashcards

What are cost accounting and its essential steps? These flashcards can help. The first thing that is important to know is what cost accounting is. Cost accounting is the recording of all the costs acquired in a business in a way that can be used to improve its management. The primary purpose of cost accounting is to determine the price of each product of the company. Read and study these flashcards to learn more.

45 cards   |   Total Attempts: 182
  

Cards In This Set

Front Back
Uses linear algebra and global consumption ratios without sacrificaing accuracy
Equally Accurate Simplification
Uses the most expensive activities, the inexpensive activities are allocated to the expensive ones proportionally
Approx. relevant simplification
Simplifying costs after-the-fact
1. Approx. relevant 2. Equally accurate (TDABC)
Added to cost of job (No Journal entry)
Abnormal spoilage
High/low method is defined by
Output
Don't add to cost of job OH Control XX Materials XX Payroll XX
Normal spoilage
A hybrid of job order costing and process costing
Operation costing
Unique. custom batches, can be used by both service and manufacturing firms
Job Order Costing
Services differ from products in 4 ways:
1. intangibility 2. inseparability 3. heterogeneity 4. perishability
An activity that is consumed by a final cost object such as a product or customer
Primary activity
Candidates for ABC include:
1. Plants with multiple products 2. High product diversity 3. Significant non-unit level overhead
Products consume overhead activites in different proportions
Product Diversity
Journal entry for overapplied overhead when material
OH Control XX WIP XX FG XX COGS XX
Journal entry for overapplied overhead when inmaterial
OH Control XX COGS XX
Actual Overhead < Applied Overhead
Overapplied overhead