Standard Costs-Management by Exception: Learning Objective of the Article: Define and explain the terms “standard cost” and “management by exception”. Definition and Explanation of Standard Cost and Management by Exception: A standard cost is the predetermined cost of manufacturing a single unit or a
Standard Cost Per Unit Definition: The standard cost of a unit of product as shown on the standard cost card; it is computed by multiplying the standard quantity or hours by the standard price or rate for each cost element.
Standard Cost Method Definition: Standard Cost Method method charges issued materials at a predetermined or estimated price reflecting a normal or an expected future price. The difference between the actual and standard cost is recorded in a purchase price variance account. The variance account
Standard Cost Card Definition: Standard cost card is a detailed listing of the standard amounts of materials, labor, and overhead that should go into a unit of product, multiplied by the standard price or rate that has been set for each cost element.
Staff Definition: A position in an organization that is only indirectly related to the achievement of the organization’s basic objectives. Such positions are supportive in nature in that they provide service or assistance to line positions or to other staff positions.
Cost Accounting Procedure for Spoiled Goods: Cost accounting should provide product costs and cost control information. In the case of spoilage, the first requirement is to know the nature and cause of the spoiled units. The second requirement, the accounting problem is to record
Split-Off Point Definition: That point in the manufacturing process where some or all of the joint products can be recognized as individual products.
Spending Variance in Factory Overhead Learning Objective of the article: Define and explain factory overhead spending variance. How is FOH spending variance calculated? Definition: Factory Overhead spending variance is the difference between actual expenses incurred and the budgeted allowance based on actual hours worked. The
Specific Environment Definition: The part of the environment that is directly relevant to the achievement of an organization’s goals.
Specific Cost Method Definition: Under this method specific cost of materials issued is charged to production. When materials are purchased for a particular job, they should be charged to that particular job at their actual cost. This method is suitable for job order industries
Special Order Definition: A one-time order that is not considered part of the company’s normal ongoing business.
Insolvency of Acceptor in Bills of Exchange: Learning Objectives: How the matter is treated in accounting for bills of exchange when the drawee becomes insolvent? Insolvency of a person means that he is unable to pay his liabilities. This will mean that bill accepted
Socialization Definition: The process that adapts employees to the organization’s culture.
Six Sigma: Learning objective of the article: Define and explain the concept of six sigma. Give an example. What are advantages and disadvantages of six sigma. Prepare a list of companies that have implemented six sigma. Definition and explanation of six sigma: Motorola popularized
Single Entry Versus Double Entry System of Bookkeeping: Learning Objectives: What is the difference between single entry system and double entry system of bookkeeping? What are the advantages of double entry system over the single entry system of bookkeeping. Single entry system of bookkeeping
Single Entry System/Accounts From Incomplete Records: Learning Objectives: Define and explain single entry system. What are the limitations of single entry system. How profit is calculated under single entry system of accounting. Definition and Explanation of Single Entry System: It is difficult to define
Single Column Cash Book: Learning Objectives: Define and explain single column cash book. Prepare a single column cash book. Definition and Explanation: Single column cash book records only cash receipts and payments. It has only one money column on each of the debit and
Simple Rate of Return Method: Learning Objectives: Compute the simple rate of return for an investment project. Definition and Explanation: The simple rate of return method is another capital budgeting technique that does not involve discounted cash flows. The method is also known as