Accounting 1212, Class Notes, Chapter 04

These flashcards cover key concepts and terminology from Chapter 4 of Accounting 1212, focusing on cost allocation and management.

Overhead

Indirect manufacturing costs that are allocated to products.

Activity-Based Costing (ABC)

A costing method that focuses on activities as the basis for allocating indirect costs to products and services.

Cost Driver

The primary factor that causes a cost to increase or decrease.

Target Price

The amount customers are willing to pay for a product or service.

Target Cost

The maximum cost to develop, produce, and deliver a product or service to earn the desired profit.

Just in Time Management System

An inventory management system focusing on producing just in time to meet customer demand, emphasizing lean inventory levels.

Manufacturing Costs

Costs that include direct materials, direct labor, and manufacturing overhead.

Non-Manufacturing Costs

Costs that include selling and administrative expenses.