Topic 1 - Manufacturing

100 vocabulary-style flashcards covering key cost-flow terms from the lecture notes.

Raw Materials (Production Input)

Materials used in the production of the cost object or product.

Raw Materials (Untransformed State)

Materials that have not yet been transformed and are used in manufacturing.

Raw Materials (Inventory Storage)

Stored in inventory until they are consumed in production.

Raw Materials (Finished Product Component)

Direct input to production that becomes part of the finished product.

Work in Process (Incomplete Goods)

Goods currently incomplete as to assembly or production.

Work in Process (Tied-Up Costs)

Costs tied to items in production but not yet finished.

Work in Process (Manufacturing Stage)

Inventory stage representing partially completed goods.

Work in Process (Partial Outputs)

Partially completed outputs that will become finished goods.

Finished Goods (Ready for Sale)

Fully complete final products ready for sale and distribution.

Finished Goods (Completed Inventory)

Inventory of completed but not yet sold goods.

Finished Goods (Manufacturing Output)

Output of manufacturing ready for shipment.

Finished Goods (Costs Held Until Sale)

Costs bound up in finished goods until sale.

Direct Materials (Attributable to Product)

Materials directly attributable and distinguishable in the finished product.

Direct Materials (Traceability)

Materials that can be traced to a specific product.

Direct Materials (Product Cost Input)

Direct inputs that form a component of the product cost.

Direct Materials (Prime Cost Component)

Part of Prime Costs.

Indirect Materials (Non-Attributable)

Materials NOT attributable and distinguishable in the finished product.

Indirect Materials (Non-Traceable Use)

Materials used in production but not traceable to a single product.

Indirect Materials (Factory Overhead Inclusion)

Included in Factory Overhead.

Indirect Materials (Overhead Item)

Overhead item included in overhead costs.

Direct Labor (Traceable Physical Work)

Salaries paid for explicit work, especially TRACEABLE physical work in the ACTUAL production of the product.

Direct Labor (Traceable Wages)

Wages that can be traced to a specific product.

Direct Labor (Manufacturing Tie)

Labor costs directly tied to manufacturing.

Direct Labor (Prime Cost Component)

A component of Prime Costs.

Factory Overhead (Indirect Plant Costs)

Any indirect costs incurred in the manufacturing plant.

Factory Overhead (Non-Traceable to Product)

Costs not directly traceable to a single product.

Factory Overhead (Conversion Cost Component)

Part of Conversion Costs.

Factory Overhead (Examples)

Overhead like utilities and depreciation or other indirect costs.

Period Costs (Incurrence Location)

Costs incurred OUTSIDE the factory; Operating Expenses; Selling or General Administrative.

Period Costs (Accounting Treatment)

Costs expensed in the period; not inventoried.

Period Costs (Alternative Term)

Another term for Operating Expenses outside manufacturing.

Period Costs (Inventory Exclusion)

Costs separate from product costs and not included in inventory.

Product Costs (Incurrence Location)

Costs incurred INSIDE the factory; also called inventoriable costs.

Product Costs (Accounting Treatment)

Costs that are capitalized as inventory until sold.

Product Costs (Included Components)

Direct Materials, Direct Labor, and Factory Overhead are included.

Product Costs (Inventory Valuation Purpose)

Used to value inventory before sale.

Inventoriable Costs (Capitalization)

Product costs that are capitalized as inventory.

Inventoriable Costs (Financial Statement Flow)

Costs that flow to the Balance Sheet until goods are sold.

Inventoriable Costs (Synonym)

Another name for Product Costs.

Inventoriable Costs (Core Components)

Include RM, DL, and Factory Overhead within the factory.

Operating Expenses (Business Running Costs)

Costs associated with running the business outside the factory.

Operating Expenses (Types)

Selling and Administrative expenses.

Operating Expenses (Expensing Rule)

Expensed in the period; not inventoried.

Operating Expenses (Period Cost Relation)

Part of Period Costs that arise from day-to-day operations.

Selling Expenses (Purpose)

Costs incurred to sell products.

Selling Expenses (Category)

A subset of Operating Expenses.

Selling Expenses (Inventory Impact)

Not included in inventory values.

Selling Expenses (Examples)

May include advertising or sales commissions in practice.

General Administrative Expenses (Overhead Type)

Overhead related to general admin activities.

General Administrative Expenses (Category)

Part of Operating Expenses.

General Administrative Expenses (Expensing Rule)

Expensed in the period; not inventoried.

General Administrative Expenses (Examples)

Includes corporate salaries, rent, and office costs.

Manufacturing (Definition: Act of Creation)

The act of creating and making of various articles/products using machinery and/or labor.

Manufacturing (Definition: Conversion Process)

The process of converting raw materials into finished goods.

Manufacturing (Definition: Broad Term)

A broad term for the production process inside a factory.

Manufacturing (Definition: Cost Flow Link)

Linked to cost flows within the factory.

Production (Definition: Process)

The process of producing goods.

Production (Definition: Activity)

The activity that converts raw materials into finished goods.

Production (Definition: Output)

Output generated by a manufacturing process.

Production (Definition: Purpose)

Goods produced for sale.

Cost Object (Definition: Measurement Item)

A cost object is any item for which costs are measured.

Cost Object (Definition: Examples)

Could be a product, department, or project.

Cost Object (Definition: Accumulation Destination)

The destination for accumulated costs.

Cost Object (Definition: Assignment Basis)

Basis on which costs are assigned.

Cost Flows (Definition: Inventory Movement)

The movement of costs through Raw Materials, Work in Process, and Finished Goods.

Cost Flows (Definition: Progression)

The progression of costs from input to finished product.

Cost Flows (Definition: Accumulation)

Flow of cost accumulation in manufacturing.

Cost Flows (Definition: Allocation)

How costs are allocated in inventory accounts.

Raw Materials Inventory (Definition: Holding)

Inventory holding Raw Materials before use.

Raw Materials Inventory (Definition: Asset Type)

Current asset representing RM not yet converted.

Raw Materials Inventory (Definition: Cost Flow Stage)

Stage in cost flow before production begins.

Raw Materials Inventory (Definition: Balance Sheet)

Part of the balance sheet's inventory accounts.

Work in Process Inventory (Definition: Partially Completed)

Inventory of partially completed goods.

Work in Process Inventory (Definition: Accumulated Costs)

Costs accumulated for products in production but not finished.

Work in Process Inventory (Definition: RM-FG Bridge)

Bridge between RM and FG in cost flow.

Work in Process Inventory (Definition: Contents)

Includes direct materials, direct labor, and overhead for items in progress.

Finished Goods Inventory (Definition: Awaiting Sale)

Inventory of completed goods awaiting sale.

Finished Goods Inventory (Definition: Cost of Unsold)

Cost of finished products not yet sold.

Finished Goods Inventory (Definition: Readiness)

Represents products ready for distribution.

Finished Goods Inventory (Definition: COGS Transfer)

Transfers to cost of goods sold when sold.

Manufacturing Overhead (Definition: Synonym)

Another term for Factory Overhead.

Manufacturing Overhead (Definition: Scope)

All indirect costs of the manufacturing process.

Manufacturing Overhead (Definition: Conversion Costs)

Part of the conversion costs.

Manufacturing Overhead (Definition: Allocation Purpose)

Allocated across products as part of overhead.

Prime Costs (Definition: Components)

Direct Materials plus Direct Labor.

Prime Costs (Definition: Primary Costs)

The two primary costs in producing a product.

Prime Costs (Definition: COGS Impact)

Cost category that affects the cost of Goods Sold directly.

Prime Costs (Definition: Calculation Use)

Used to compute the cost of manufacturing before overhead.

Conversion Costs (Definition: Components)

Direct Labor plus Factory Overhead.

Conversion Costs (Definition: Purpose)

Costs to convert raw materials into finished goods.

Conversion Costs (Definition: Included Elements)

Represents labor and overhead to convert inputs.

Conversion Costs (Definition: Efficiency Metric)

Used to evaluate efficiency of production.

Inside Factory Costs (Definition: Incurrence Location)

Costs incurred inside the factory.

Inside Factory Costs (Definition: Product Cost Inclusion)

Costs included in product costs.

Inside Factory Costs (Definition: Production Base)

Factory-based costs used to produce goods.

Inside Factory Costs (Definition: Covered Elements)

Covers direct materials, direct labor, and overhead allocated.

Outside Factory Costs (Definition: Incurrence Location)

Costs incurred outside the factory.

Outside Factory Costs (Definition: Period Cost Inclusion)

Part of Period Costs.

Outside Factory Costs (Definition: Activity Link)

Linked to selling and administrative activities.

Outside Factory Costs (Definition: Expensing Rule)

Expensed rather than inventoried.