Ch 2: Job Order Costing

Which companies would most likely used operations costing?

Automobile manfacturers

What is the basic formula for prices costing?1

Average unit cost = total manufacturing cost/ total units produced

When is the predetermined overhead rate calculated?

Before the period begins

The Manufacturing Overhead account has a $10,000 debit balance that is closed directly to Cost of Goods Sold. Which of the following statements is true?

Actual manufacturing overhead was more than applied manufacturing overhead & the entry to eliminate the balance in Manufacturing Overhead will increase Cost of Goods Sold

Actual manufacturing overhead costs are recorded where?

On the left (debit) side of the Manufacturing Overhead account

Process costing is used by companies that make what?

Standardized or homogeneous products or services

Process costing ______.

is used in homogeneous products and is used for mass production

The first step in assigning manufacturing overhead is to determine the ___________________ __________________ or cost drivers.

allocation base

Manufacturing overhead costs ______.

include some materials and labor must be manufacturing costs are indirect costs

Materials requisition forms are used to ______.

control the flow of materials from inventory into production and record the cost of raw materials in the accounting system

Job order costing requires a good record-keeping system that uses _____________________ documents that trace direct costs to specific jobs.

source

Applied manufacturing overhead costs are recorded where?

On the left (debit) side of the Work in Process Inventory account & On the right (credit) side of the Manufacturing Overhead account

Before disposing of its year - end manufacturing overhead balance, Delphi Corporation had the following amounts in Manufacturing Overhead and Cost of Goods Sold: Applied manufacturing overhead $100,000 Actual manufact uring overhead 90,000 Unadjusted cost of goods sold 800,000 If Delphi closes the balance of its Manufacturing Over head account directly to Cost of Goods Sold, how much is adjusted cost of goods sold?

$790,000

Job-order costing would most likely be used in a(n) ______.

Construction company

The major difference between job order and process costing is what?

Whether the products produced are similar or different

A cost driver is ______.

a measure that explains or influences the amount of manufacturing overhead cost incurred

Cost driver

a measure that has a cause and effect relationship with cost and is sued to allocate or assign indirect costs to products

True or false: Job-order costing can only be used in manufacturing firms.

FALSE

The costs incurred for each unique product, project, or service are recorded on a document called a(n) ______________ _____________.

Job cost

What document specifies the type and quantity of direct materials used on a specific job?

Materials requisition form

Which of the following cost(s) is (are) recorded directly into the Work in Process Inventory account? a. Direct materials. b. Indirect materials. c. Direct labor. d. Both a and c. e. All of the above

d. Both a and c

Companies that use job-order costing ______.

make unique products

A direct labor _______________ ______________ is a document used to record how long workers spend on each job and task.

time ticket

The major difference between job order and process costing is ______.

whether the products produced are similar or different