Job Order Costing: Overhead Allocation and Absorption Flashcards

1
Q

What are overheads

A

Indirect costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

How to compute the plantwide overhead rate / overhead absorption rate by using 1 driver

A

Step 1) Find the cost driver

Step 2) Add up all overheads/indirect costs

Step 3) Find the overhead absorption rate by doing total overhead cost / cost driver in q

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How to figure out how much overhead is allocated for each job

A

Rate x cost driver

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

How to work out the full production cost

A

total direct costs + total indirect costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

How to allocate overhead costs to each department with a cost centre approach

A

Step 1) Find out what cost driver they are associated with.

Step 2) Multiply cost driver by the meters. If associated with more then one, find the range of the metres and multiply range by all the metres

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are the operating centres

A

Assembly and fitting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the service centres

A

Personnel

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

How to re-allocate the costs of the service cost centre to the two operating centres using the no. of employees as allocation basis.

A

Get the total service centre total costs divide by the total employees of the two operating centres

times answer by number of employees in the two operating centres

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

How to compute the pre-determined overhead rate for centres based on a cost driver

A

Add that centre total costs and reallocated costs (or if you have, total overhead costs)

that total divided by total cost driver

same with other centre

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How to work out costs applied to job x

A

total costs for job + total overhead costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How to work out amount under or over applied

A

Predetermined overhead rate x actual cost of driver

If bigger then MOHC then overapplied, vice versa

if under applied, take away MOHC from whats under applied to get whats actually under applied

if over applied, take that away from MOHC to see by how much over applied

if numbers not making sense do rate as a %

How well did you know this?
1
Not at all
2
3
4
5
Perfectly