Ch 3 - 471

factory overhead

cost that is directly related to production but not attributable to a product

periodically allocated, distribution, assessment

costs are accumulated over a period of time, such as a month or a quarter. At the end of the period, these costs are __________________ to other controlling objects. the book discusses two techniques: _________ and ________

Internal Activity Allocation

costs are allocated when they are incurred, not at the end of a period

Assessment

in the _______ technique of periodic allocation costs are aggregated (cost elements combined)

Distribution

in the _______ technique of periodic allocation costs are not aggregated

Assessment

in the _______ technique of periodic allocation the Identity of cost elements is lost once received by the receiving object

allocated, distribution

A settlement rule indicates how the costs accumulated in the internal order will be ________ among the various receivers. Each allocation is defined in a _______ rule, which specifies a receiver, an amount, and the timing of the settlement

Settlement

A technique used to allocate accumulated costs in an internal order

controlling area

All costs in management accounting are allocated within a _______________, and processes in overhead management and product costing are completed at that level.

assignments

Each allocation structure includes multiple __________ that identify the types of costs or revenues to be accumulated and settled

Distribution

In the _______ technique of periodic allocation the identity of cost elements remains the same in the receiving object

activity types, rate

Internal Activity Allocation is an immediate flow-through of costs using measurable _______ and ______

cost accounting or controlling

Management accounting is sometimes referred to as

cost center accounting

Periodic allocation and internal activity allocation are techniques for allocating costs in ____________________, one of the two key processes in overhead management.

sequences

Strategy __________ include - Priority - Specific strategies - Type of settlement - Settlement percentage

cost center standard hierarchy

Structure to define the various cost centers. all cost centers must belong to the standard hierarchy.

T

T or F: Primary cost elements are associated with general ledger accounts whereas secondary cost elements are not associated with general ledger accounts

transaction

The _______ currency is the currency the organization uses when it posts controlling transactions; for example, when it posts supplies expenses to a cost center. Does not be the same as the other two currencies in terms of model types.

distribution

The _________ technique of periodic allocation is appropriate for allocating primary costs. Each primary cost is allocated individually

object

The __________ currency is the currency associated with a controlling object, such as a cost center or an internal order. if decentralized model, then currency can be different than company code currency if Centralized model, then currency can be different only if controlling area currency is the same as company code currency

controlling area

The ____________ currency is the currency the organization uses for all of its management accounting data. if decentralized model, then the currency and the company code currency are the same. If centralized model, then it must choose which currency to use

debit, credit

The financial accounting impact when purchasing supplies is recorded with a ______ to the supplies expense account and a ______ to the bank account.

Primary cost elements

_________ are associated with general ledger accounts and are used to transfer data between financial accounting and management accounting

secondary cost elements

_________ are not associated with general ledger accounts and are used to transfer data within management accounting

Activity type

_________ defines the activity or work performed by a cost center.

financial

_____________ accounting (1) is less flexible with compliance requirements, (2) is geared for individuals and agencies outside the organization, such as investors and regulators and (3) includes mostly historical data.

management

_____________ accounting (1) is more flexible with compliance requirements, (2) is geared towards individuals and groups within the organization, and (3) includes forward-looking as well as historical data.

cost elements

_____________ are used in the following activities: To transfer costs from financial accounting to controlling. To allocate costs in cost center accounting via assessments and distributions. To allocate costs in internal order accounting using settlement techniques. Internal activity allocation.

internal order accounting, cost collectors

_____________ is used to manage temporary costs that are typically associated with an activity that has a finite life. Internal orders are used to represent these temporary events, and they, rather than cost centers, serve as the initial __________

Cost of goods manufactured

______________ = direct material cost + direct labor cost + indirect cost

source structure

a _______ is a type of settlement parameter that identifies the source of costs to be settled. defined as part of allocation structures; defined separately and used in various controlling processes.

allocation structure

an _______ is a type of settlement parameter that identifies the type and source of costs to be included, the method of settlement, and valid types of receivers. Different types are defined for different purposes; created for an initial purpose

ongoing

cost center accounting tracks and allocates costs incurred on an __________ basis

general ledger

costs incurred in other departments that support the overall goal of the organization are included in ___________ accounts such as sales, general and administration costs

settlement

internal order accounting allocates accumulated costs using___________, which is a technique used to transfer the costs from the internal order to other controlling objects or to general ledger accounts

temporary

internal order accounting tracks and allocates costs incurred on an __________ basis

Management accounting

is concerned with tracking costs and revenues for internal purposes

assessment

the _________ technique of periodic allocation is used to assign multiple costs to a receiver at the same time. Going further, these costs can be both primary and secondary costs. Essentially, two or more costs are combined to create a secondary cost.

Product Costing

this key process in management accounting is concerned with accurately tracking the costs of creating a product or service and calculating the cost of goods manufactured. include direct costs and indirect costs.

overhead management

this key process in management accounting is responsible with tracking and allocating indirect costs with the goal of cost containment

profitability analysis

this key process in management accounting takes into consideration both costs and revenues to evaluate the profitability of different parts of the organization