Chapter 2 Flashcards
A costing method that includes all manufacturing costs - direct materials, direct labor, and both variable & fixed manufacturing overhead - in the cost of a product.
ABSORPTION COSTING
A measure of activity such as direct labor-hours or machine-hours that is used to assign costs to cost objects.
ALLOCATION BASE
A document that shows the quantity of each type of direct material required to make a product.
BILL OF MATERIALS
A factor, such as machine-hours, beds occupied, computer time or flight-hours, that causes overhead costs.
COST DRIVER
Units of product that have been completed but not yet sold to customers.
FINISHED GOODS
A form that records the materials, labor, and manufacturing overhead costs charged to a job.
JOB COST SHEET
A costing system used in situations where many different products, jobs, or services are produced each period.
JOB-ORDER COSTING
A document that specifies the type and quantity of materials to be drawn from the storeroom and that identifies the job that will be charged for the cost of those materials.
MATERIALS REQUISITION FORM
A costing system with multiple overhead cost pools and a different predetermined overhead rate for each cost pool, rather than a single predetermined overhead rate for the entire company. Each production department may be treated as a separate overhead cost pool.
MULTIPLE PREDETERMINED OVERHEAD RATES
A costing system in which overhead costs are applied to a job by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job.
NORMAL COST SYSTEM
A credit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost applied to Work In Process exceeds the amount of overhead cost actually incurred during a period.
OVERAPPLIED OVERHEAD
The process of charging manufacturing overhead cost to job cost sheets and to the Work in Process account.
OVERHEAD APPLICATION
A single predetermined overhead rate used throughout a plant.
PLANTWIDE OVERHEAD RATE
A rate used to charge manufacturing overhead cost to jobs that is established in advance for each period.
PREDETERMINED OVERHEAD RATE =
est. total manuf. O/H cost / est. total amt. of allocation base
Any materials that go into the final product.
RAW MATERIALS
A schedule that contains three elements of product cost - direct materials, direct labor, and manufacturing overhead - and that summarizes the portions of those costs that remain in ending Work in Process inventory and that are transferred out of Work in Process into Finished Goods.
SCHEDULE OF COST OF GOODS MANUFACTURED
A schedule that contains three elements of product cost - direct materials, direct labor and manufacturing overhead - and that summarizes the portions of those costs that remain in ending Finished Goods inventory and that are transferred out of Finished Goods into Cost of Goods Sold.
SCHEDULE OF COST OF GOODS SOLD
A document that is used to record the amount of time an employee spends on various activities.
TIME TICKET
A debit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost actually incurred exceeds the amount of overhead cost applied to Work in Process during a period.
UNDERAPPLIED OVERHEAD
Units of product that are only partially complete and will require further work before they are ready for sale to the customer.
WORK IN PROCESS
