Accounting 2020 - Chapter 2 - Learnsmart

Widely used allocation bases in manufacturing are:

- Direct Labor Cost - Machine Hours - Direct Labor Hours - Units of Product

A factor that causes overhead costs is called:

A. Cost Driver** B. Manufacturing cost C. Cost Object D. Predetermined Overhead rate

The process used to assign overhead costs to products is called overhead ____________.

Allocation

Typical cost drivers include:

Computer time Flight-hours Machine-hours

Total cost for a job includes:

Direct Labor Cost Direct Materials Cost Applied Manufacturing Overhead

Formula for predetermined overhead rate is:

Estimated manufacturing overhead cost divided by estimated allocation base

In a system that uses multiple predetermined overhead rates, overhead is applied:

In each department as jobs proceed through the department

Which of the following is an essential quality of an overhead allocation base:

It must be common to all the companies products and services

Companies that make many different products each period use ______________ - ______________ costing.

Job Order

Companies that use job order costing:

Make many products

The manufacturing overhead account contains:

Many different kinds of indirect costs

The predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find:

Overhead applied to the job

When all overhead is assigned using direct-labor hours, the company has chosen to use an ____________ predetermined overhead rate

Plantwide

An hour by hour summary of an employees activities throughout the day is found on the __________ __________.

Time ticket

A multiple predetermined overhead rate system is more accurate than a plant wide overhead rate system because it:

reflects differences in how overhead costs are incurred within departments.

Materials Requisition forms are used for:

- Making journal entries in accounting records - Controlling the flow of materials into production

Categories of manufacturing costs include:

- Manufacturing Overhead - Direct Labor - Direct Materials

Job cost sheet contains:

- Materials costs charged to the job - Manufacturing overhead costs charged to the job - Labor costs charged to the job

A bill of materials contains the:

- Type of each direct material needed to complete a unit of product - Quantity of each direct material needed to complete a unit of product

Cost assigned to units of product under absorption costing include:

- Variable Manufacturing - Fixed Manufacturing

A measure such as direct labor-hours or machine hours used to assign overhead costs to products and services is called a cost driver or an ____________ ____________.

Allocation Base