amount per unit produced or used. Therefore, the total amount of the variable cost will change proportionately with the change in volume or activity. Learn more about variable costs Join PRO to Track Progress Mark the...
amount per unit produced or used. Therefore, the total amount of the variable cost will change proportionately with the change in volume or activity. Learn more about variable costs Join PRO to Track Progress Mark the...
this asset’s account balance must be decreased. Therefore, the second part of the entry will have to be a debit. In this transaction the account Rent Expense will be debited for $600. (Recall that expenses must be...
must match each employee’s Medicare tax of 1.45% (but does not match the employee’s Additional Medicare Tax). Information on the Additional Medicare Tax can be found at www.irs.gov. Join PRO to Track Progress Mark...
The cost of repairing or replacing previously sold products during their warranty periods.
See fixed manufacturing overhead volume variance.
A dividend paid in assets other than cash.
Dollars of gross profit divided by the dollars of net sales. Also known as gross margin.
See inventory: work-in-process (WIP).
The products with significant value that emerge at a split-off point in a process. When a joint product has little value it is referred to as a by-product.
Net income divided by net sales.
Process Costing(Quick Test) Download PDF After you have answered all 25 questions, click "Grade This Quick Test" at the bottom of the page to view your grade and receive feedback on your answers. Note: Some of the...
Work-in-progress is the long-term asset account that is used to report the amounts spent on the construction of buildings and equipment until the asset is completed and put into service.
See phantom profits.
A mathematical tool to optimize profits (contribution margin) given a limited amount of inputs and other constraints.
Also referred to as illusory profits. Occurs because accountants use past costs rather than replacement costs. For example, in computing the cost of goods sold accountants often use the FIFO cost flow assumption. This...
In manufacturing, the product cost includes direct materials, direct labor, and manufacturing overhead. A retailer’s product cost is the net cost from suppliers plus costs to get the product in place and ready for...
Net sales revenues minus the cost of goods sold.
A formal, written promise to pay interest and to repay the principal amount.
See manufacturing costs.
The expenses directly incurred by a nonprofit organization in providing one of its programs.
The activities provided by a nonprofit in carrying out one of its major programs.
A department within a factory that does not directly produce a product. Examples are the factory maintenance department, factory administrative department, and quality assurance department.
A simple form of business where there is one owner. Legally the owner and the sole proprietorship are the same. However, for accounting purposes the economic entity assumption results in the sole proprietorship’s...
See gross profit percentage.
activity. A 200% increase in activity is so significant that even fixed costs will likely change. For example, you may need to add another supervisor, another manager, and to expand the warehouse. 7. A sole...
A division or department of a business whose managers are responsible for both revenues and expenses.
A department that is directly involved in manufacturing products. Examples are the machining, finishing, and assembling departments.
Improving Profits Improving Profits Improving profits or reducing operating losses is likely to require some decisions and some action. Both the decisions and the actions involve the future and may involve: expanding a...
The cost accounting system where similar units are mass produced. Costs are collected by department and are then assigned to the units produced.
A major classification on the balance sheet. It is the second long term asset section after current assets. Included are land, buildings, leasehold improvements, equipment, furniture, fixtures, delivery trucks,...
This is a long term asset account that accumulates the cost of a project that has not yet been placed into service. When the project is finished and placed into the service, the cost is removed from this account and is...
See cost of goods sold.
The analysis of how profits change as volume changes. The calculation of the break-even point is a part of cost-volume-profit analysis.
Our Explanation of Improving Profits will assist you in focusing on the costs and revenues that are relevant (and ignoring those which are not relevant) for improving profits and eliminating losses. Examples of the...
See nonprofit organization.
See inventory: work-in-process (WIP).
Our Explanation of Improving Profits will assist you in focusing on the costs and revenues that are relevant (and ignoring those which are not relevant) for improving profits and eliminating losses. Examples of the...
See Allowance for Doubtful Accounts.
A term used in cost accounting to arrive at the cost per unit. The term is associated with the units that are not completed at the end of an accounting period. For example, if 500 units are completed as far as materials,...
that are subject to a sales tax. Mark as wrong Mark as right chart of accounts This listing of available general ledger accounts does not contain amounts. chart of accounts This listing of available general ledger...
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