Chapter 4 - Job Costing

Question 1

What is a cost pool?

Answer 1

A grouping of individual indirect cost items.

Question 2

What is a cost allocation base?

Answer 2

is a systematic way to link an indirect cost or group of indirect costs

Question 3

What is a job costing system?

Answer 3

The cost object is a unit or multiple units of a distinct product or service called a job

Question 4

What is a process-costing system?

Answer 4

In a process-costing system, the cost object is masses of identical or similar units of a product or service.

Question 5

What is the 5 step decision making process in a job costing system?

Answer 5

1. ) Identify the problems and uncertainties
2. )Obtain Information
3. )Make predictions by choosing among alternatives
4. )Make decisions by choosing among alternatives
5. )Implement the decision, evaluate performance, learn

Question 6

What is actual costing?

Answer 6

a costing system that traces direct costs to a cost object based on the actual direct-cost rates times the actual quantities of the direct-cost inputs used.

Question 7

What is budgeted indirect-cost rate?

Answer 7

Budgeted annual indirect costs divided by budgeted annual quantity of the cost-allocation base.

Question 8

What is normal costing?

Answer 8

a costing system that (1) traces direct costs to a cost object by using the actual direct-cost rates times the actual quantities of the direct-cost inputs and (2) allocates indirect costs based on the budgeted indirect-cost rates times the actual quantities of the cost-allocation bases.