Chapter 4 Flashcards
1
Q
Process Costing
Example companies:
- Weyerhaeuser (paper manufacturing)
- Reynolds Aluminum (refining aluminum ingots)
- Coca-Cola (mixing and bottling beverages)
A
Job-order Costing
Example companies:
- Boeing (aircraft manufacturing)
- Bechtel International (large scale construction)
- Walt Disney Studios (movie production)
2
Q
Comparing Process and Job-Order Costing
A
3
Q
A
4
Q
Direct Manufacturing Costs
A
5
Q
A
6
Q
Why Use an Allocation Base?
A
- It is impossible or difficult to trace overhead costs to particular jobs.
- Manufacturing overhead consists of many different items ranging from the grease used in machines to production manager’s salary.
- Many types of manufacturing overhead costs are fixed even though output fluctuates during the period.
7
Q
What is Allocation Base?
A
Manufacturing overhead is applied to jobs that are in process. An allocation base, such as direct labor hours, direct labor dollars, or machine hours, is used to assign manufacturing overhead to individual jobs.
8
Q
- *Manufacturing Overhead Application**
- *What is POHR?**
A
9
Q
Why do we need POHR?
A
1/ Using a predetermined rate makes it possible to estimate total job costs sooner.
2/ Since actual overhead for the period is not known until the end of the period.
10
Q
Application of Manufacturing Overhead
A
