Job-Order Costing Flashcards
why do businesses need to know the cost of p&s?
so that they can make decisions about margins, marketing, new products, scrapping of old products
what is contract costing?
a costing system that is applied to relatively large units that take long time to complete
what are job costing sheets?
these show details of costs of DM, DL, OH to complete the job
what is the schedule of costs of goods manu/sold?
details the costs of DM, DL, OH applied to WIP in the period and shows changes to WIP inventory
what is average cost?
a method of valuing stock that was purchased (@ different prices) @ average cost
what is control cost?
a summary account where entries are made from totals of transactions for a period
stores/materials requisition
a document giving formal authorization for the issue of materials, listing type and quantity issued and job details. filled in by production manager.
what is a sales order?
these are prepared as the basis for issuing a production order
what is a production order?
initiates work on a job
three steps in allocating OH?
- identify cost driver (labor hours)
- calculate PDOHR per cost driver
- apply it to the x quantity of cost driver used
what are actual MOH?
directly incurred throughout the accounting period and charged to the overhead account
what are applied MOH?
estimated overhead resources that will be used and applied to the product using PDOHR
what is a cost allocation?
the process of assigning costs when the quantity of resources consumed by a cost object cannot be directly measured.
what is the basis used to allocate costs?
cost driver
allocation base
underapplied overheads?
actual > applied
