Managerial Accounting Chapter 11

A cost directly related to the production of goods, including direct materials, direct labor, and manufacturing overhead.

Raw materials that become an integral part of the finished product.

Wages paid to workers directly involved in manufacturing the product.

Indirect costs associated with the manufacturing process, such as factory rent, utilities, and machinery depreciation.

Costs incurred in a specific period and not directly associated with the production of goods, such as selling expenses, administrative expenses, and research and development costs.

Expenses incurred to promote a product or service. These costs are not directly related to the production of the product itself.

Payments made to salespeople based on the amount of product they sell. These costs are not associated with the actual production of the goods.

Wages paid to employees responsible for maintaining the factory's equipment and facilities. These costs are considered manufacturing overhead because they are indirectly related to the production process.

Compensation paid to the person overseeing the factory's operations. This is considered manufacturing overhead because the manager doesn't directly work on creating the product.

Expenses incurred to transport finished goods to customers. These costs are not part of the product's manufacturing cost.

Compensation paid to employees who check the quality of the final product. This cost is considered manufacturing overhead because it's indirectly related to the production process.

Costs that are not related to the actual creation of products. These typically fall under selling, general, and administrative expenses.

A type of manufacturing overhead cost because it's not directly traceable to a specific product, but is necessary for the factory operations.

A type of manufacturing overhead cost because it's an expense that's spread out over the useful life of the equipment.

Product costs are associated with making the product, like materials, labor, and overhead. Period costs are unrelated to production, like selling, general, and administrative expenses.

All activities involved in delivering a product or service.

Allocating overhead costs based on how much each product uses various activities.

A system focused on reducing defects in products to achieve zero defects.

Manufacturing or purchasing goods only when needed for sale or use.

Performance measurement system using both financial and nonfinancial measures aligned with company objectives.

A company's efforts to use sustainable practices regarding employees, society, and the environment.

A code of ethical standards developed by the Institute of Management Accountants.

To minimize defects in finished products by achieving zero defects.

The total cost of goods completed during a period, including direct materials, direct labor, and manufacturing overhead incurred. It represents the cost of transforming raw materials into finished goods ready for sale.

The sum of all direct materials, direct labor, and manufacturing overhead costs incurred during a period. This represents the total cost of turning raw materials into finished goods.

A series of business processes involved in manufacturing a product, starting from raw materials and ending with the finished product ready for sale. This includes activities like purchasing, production, and distribution.

Businesses that provide services rather than tangible goods. They focus on delivering intangible value, such as expertise, advice, or convenience.

A significant portion of the U.S. economy now focuses on services, and about 80% of U.S. workers are employed by service companies. This means the service industry is becoming increasingly important in the economy.

The direct cost of goods that a company has sold during a period, including the cost of raw materials, labor, and overhead. It represents the cost of goods removed from inventory and transferred to customers.

A system where goods are produced or purchased only when needed for sale, minimizing inventory storage costs.

A system designed to reduce product defects to a minimum, aiming for zero defects, through continuous improvement and quality control.

Identifying and managing bottlenecks or limitations in a value chain that hinder a company's profitability.

Software programs designed to manage all major business functions in one integrated system.

A costing method that allocates overhead costs to products based on their actual usage of activities.

A set of guidelines outlining expected behavior for all employees in a company.

A law that clarifies management responsibilities, requires certifications from CEOs and CFOs, and strengthens oversight of financial reporting.