Special Terms Of Cost Accounting

Cost Accounting : Calculating and controlling the cost of a unit-a single item or a group of items-of a product, service, function, or operation of a business.

Selling Price :  The price at which a product is sold.

Job-order Cost Accounting : A system that expresses the cost of each unit or each batch or job lot of goods manufactured. A job lot is a smaller than normal unit of goods or commodities produced.

Process Cost Accounting : The system used for cost accounting when a product is manufactured or processed continuously. It is suitable, for example, for flour milling, oil refining, and cement production. It uses a fixed period as one of the bases for determining costs.

Prime Cost / Direct Cost : The sum of direct material costs and direct labor costs.

Inventory : A record of goods on hand that is maintained by a business. A manufacturing concern, for example, maintains inventories of raw materials, work in process, and finished goods not yet sold or shipped.

Purchase Order :  An order for goods sent by the buyer or the seller. It describes the merchandise ordered by the buyer from the seller, states the quantity to the bought, gives the expected date of delivery, and sometimes indicates the mode of transportation preferred by the buyer.

Receiving Report : A report that show the kinds and quantities of materials received by the receiving department of a business.

Store Requisition Slip :  Another business paper that shows the description and quantity of materials to the factory. It also specifies the accounts to be debited for the materials; that is, the section or department that should be charged for them.

Overhead : Operating expenses of a business, such as security costs, foremen’s salaries, and bulding-maintenance expenses, that are not chargeable to any one department or product.

Factory Cost : The prime cost plus overhead.

Burden Rate :  The ratio at which indirect costs are allocated to specific jobs or departments.

Full Costing / Absorption Costing :  A costing system that provides an average fixed the cost for a product or process.

Direct Costing / Variable Costing : A costing system that provides an average of the costs that may vary or change in the manufacture of a product.

Standard Cost : Apredetermined cost which is then compared to actual costs to determine variances.

Post by : Rony Sutiyanto