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Cost Allocation and Definitions (DETAILED ANSWERS) 2024 - DISTINCTION GUARANTEED_.pdf
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Cost Allocation and Definitions (DETAILED ANSWERS) 2024 - DISTINCTION GUARANTEED_.pdf
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8/1/24, 7:13 AM 1/2 Prime Costs Sum of direct material and direct labor costs. Cost Allocation and Definitions Jeremiah Terms in this set (30) Cost Allocation and Definitions Allocate Assigning indirect costs to cost objects based on a reasonable basis. Assign Allocation of consumed resources to consumer activities or cost objects. Average Cost Production cost per unit of output, calculated by dividing total costs by total units produced. Controllable Costs Expenditures subject to manager discretion and predefined limits. Conversion Costs Total of direct labor cost and manufacturing overhead in processing raw materials. Cost Object Anything for which cost data is desired by a manager, e.g., products or customers. Cost of Goods Manufactured Total cost of all produced goods, including material, labor, and overhead. Differential Cost Cost that differs between alternatives in decision -making. Direct Cost Cost directly related to producing specific goods or services. Direct Labor Cost Cost of compensating employees converting raw materials into finished products. Direct Material Primary raw materials traceable to finished products. Finished Goods Inventory Products manufactured, packaged, and ready for sale. Fixed Cost Cost not varying with production or sales levels. Indirect Cost Manufacturing cost not easily seen in the product. Indirect Labor Manufacturing labor costs not directly tied to a finished product. Indirect Materials Materials in manufacturing difficult to trace to individual units. Inventoriable Product Costs All product costs recorded as an asset until sold. Manufacturing Overhead All manufacturing costs excluding direct materials and labor. Marginal Cost Cost change from one more or less unit of output. Other Indirect Manufacturing Costs Manufacturing overhead costs excluding indirect material and labor. Period Costs Expenses recognized in the period incurred, like operating expenses.The benefits of buying summaries with Stuvia:
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