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