Beginning Work in Process Inventories
Abida Rehman Beginning Work in Process Inventories First In First Out (FIFO) Costing Method: It is possible to keep beginning work in process inventory costs separate rather than average them in with…
Addition of Materials – Increase in Units and Change in Unit Cost
Sidra Farid Addition of Materials - Increase in Units and Change in Unit Cost Learning Objective: What is the effect on the calculation in the cost of production report when materials are…
Income Statement Definition
Shamsa Rafique Income Statement Definition: Income statement is the summary of a management's performance as reflected in the profitability (or lack of it) of a firm over a certain period. It itemizes…
Income Comparison of Variable and Absorption Costing
Income Comparison of Variable and Absorption Costing: Learning Objectives: Prepare income statements using variable costing and absorption costing. Why net operating income usually different under variable and absorption costing methods?…
Cost of Production Report (CPR)
Cost of Production Report (CPR): Definition and Explanation of Cost of Production Report (CPR): A departmental cost of production report (CPR) shows all costs chargeable to a department. It is…
Income and Expenditure Account
Income and Expenditure Account: Learning Objectives: Define and explain income and expenditure account. What is the purpose of preparing income and expenditure account? Example and format of Income and expenditure account…
Activity Measure Definition
Activity Measure Definition An allocation base in an activity-based costing system; ideally, a measure of the amount of activity that drives the costs in an activity cost pool.
Cost of Goods Sold (COGS) Definition
Cost of Goods Sold (COGS) Definition: Cost of goods sold, COGS, or "cost of sales", includes the direct costs attributable to the production of the goods sold by a company.…
Activity Definition
Activity Definition An event that causes the consumption of overhead resources in an organization.
Business and Quality Improvement Programs
After studying this article you should be able to understand the basic concepts underlying: Just in time (JIT) manufacturing system. Total quality management (TQM). Business process reengineering (BPR). Theory of…
Cost of Goods Manufactured COGM and Sold Statement Formulas
COGM Formula: COGM Formula : Prime Cost = Direct Materials Cost + Direct Labor Cost Total Factory Cost or Manufacturing Cost = Direct Materials + Direct Labor Cost +…
Activity Cost Pool Definition
Activity Cost Pool Definition A "bucket" in which costs are accumulated that relate to a single activity in the activity-based costing system.
Activity-Based Management (ABM) Definition
Activity-Based Management (ABM) Definition Activity based management is a management approach that focuses on managing activities as a way of eliminating waste and reducing delays and defects.
Definitions of Important Terms Used in Consignment Accounting
Definitions of Important Terms Used in Consignment Accounting: Learning Objectives: Define the most important terms used in consignment account. Commission: The term commission as used in connection with consignment denotes…
Cost of Goods Manufactured Definition
Cost of Goods Manufactured Definition: Cost of goods manufactured is the manufacturing costs associated with the goods that were finished during the period.
Activity Based Costing – GAAP and External Reports
Activity Based Costing - GAAP and External Reports Since activity based costing (ABC) system generally provides more accurate product costs than traditional costing methods, why isn't it used for external…
Activity Based Costing Example / Problem / Format
Activity Based Costing Example / Problem / Format Learning Objectives: Perform the first stage allocation of overhead costs to the activity cost pools. Compute activity rates for the activity cost…
Importance of Contribution Margin – Advantages of Cost Volume Profit (CVP) Analysis
Importance of Contribution Margin - Advantages of Cost Volume Profit (CVP) Analysis: Learning Objectives: What is the importance of contribution margin? What are the advantages of cost volume profit (CVP)…