Key Terms Flashcards
Actual cost system
An approach that assigns actual costs of direct materials, direct labor, and overhead to products.
Adjusted cost of goods sold
The cost of goods sold after all adjustements for overhead variances are made.
Applied overhead
Overhead assigned to production using prdeterminrates
Causal factors
activities or variables that invoke service cost. Generally, it is desirale to use causal factors as the basis for allocating service costs.
Commen costs
The costs of resources used in the output of two or more services or products.
Departmental overhead rate
Estimated overhead for a singe department divided by the estimated avtivity level for that same department.
Direct method
A method that allocates service costs directly to producing departments. this method ignores any interactions that may exist among support departmants.
Job
One distinct unit or set of units for which the costs of production must be assigned.
Job-order cost sheet
A subsidiary account to the work-in-progress account on which the total costs of materials, labor, and overhead for a single job are accumulated.
Job-order costing system
A costing system in which costs are colected and assigned to units of production for each individual job.
Material requisition form
A source decoment that records the type, qauntity, and unit price of the direct matrials used to each job.
Nornal cost of goods sold
The cost of goods sold befor adjustment for overhead variance.
Overapplied overhead
The amount by which applied overhead exceeds actual overhead.
Overhead variance
The difference between actual overhead and applied overhead.
Plantwide overhead rate
A single overhead rate calculated using all estimated overhead for a factory divided by the estimated activity level across the entire factory.
Predetermined overhead rate
An overhead rate computed using estimated data.
Process-costing system
A cost system that accumulates production costs by process or by department for a given period of time.
Producing departments
Units within an organization responsible for producing the products or services that are sold to customers.
Reciprocal method
A method that simultaneously allocates service costs to all user departments. It gives full consideration to interaction among support departments.
Sequential or step method
A method that allocates service costs to user departments in a sequential manner. it gives partial consideration to interactions among support departments.
Support departments
Units within an organization that provide essential support services for producing departments.
Time ticket
A source document by which direct labor costs are assigned to individaul job
Underapplied overhead
The amount by which actual overhead exceeds applied overhead.
