Managerial Ch2
Manufacturing overhead costs __________.
- are indirect costs - consist of many different items
Manufacturing overhead:
- contains fixed costs - is an indirect cost - consists of many different types of costs
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
A measure such as direct labour-hours or machine hours used to assign overhead costs to products and services is called a cost driver or a(n) ______________ ______________
Blank 1: allocation OR activity Blank 2: base OR driver
Which of the following would be considered direct materials in a service firm that uses job-order costing? - Tools in an auto repair shop - Scissors at a hair salon - Beds in a hospital - Paperwork at a law firm
Paperwork at a law firm
Which of the following is not a manufacturing cost category? - Direct Labor - Selling and Administration costs - Manufacturing Overhead - Direct Materials
Selling and Administration costs
Which of the following would not be considered a direct labor cost in a service firm that uses job-order costing? - The salary of an attorney at a law firm - The salary of a surgeon at a hospital - The salary of the manager at a hair salon - The wages of technicians at an auto repair shop
The salary of the manager at a hair salon
Which of the following would not be considered a job in service firm that uses job-order costing? - A client at a law firm - A repair job at an auto repair shop - The tax department in an accounting firm - A patient in a hospital
The tax department in an accounting firm
A cost drive is _______.
a factor that causes overhead costs to occur
A cost driver is ______.
a factor that causes overhead costs to occur
Cost-plus pricing occurs when _______.
a markup percentage is added to manufacturing costs
All manufacturing costs are assigned to units of product and all non manufacturing costs are treated as period cost under _____________ costing.
absorption OR full
An essential quality of an overhead allocation base is that it must _________.
be common to all the company's products and services
The type and quantity of each type of direct material needed to complete a unit of product is listed on the _________.
bill of materials
Cost assigned to units of product in absorption costing include ________ manufacturing costs.
both variable and fixed
The difference between direct labor and indirect labor is that direct labor ______.
can be easily traced to jobs, while indirect labor cannot
Typical cost drivers include
computer time, machine-hours, flight-hours
Job-order costing would most likely be used in a(n) ___________.
construction company
A factor that causes overhead costs is called a _______.
cost driver
The adjustment for overapplied overhead _____ net income.
decreases cost of goods sold and increases
Labor costs that are easily traced to a job are called __________ labor costs.
direct OR touch
The total cost of a job includes ___________.
direct material cost, direct labor cost, predetermined manufacturing overhead
Categories of manufacturing costs include ________.
direct materials, direct labor, manufacturing overhead
To calculate the unit product cost using the job cost sheet _________ by the number of units produced.
divide the total job cost
The adjustment for underapplied overhead _______ net income.
increases cost of goods sold and decreases
The document that records the materials, labor, and manufacturing overhead costs charged to a job is the _______.
job cost sheet
Companies that make many different products each period use ________ - _________ costing.
job order
Categories of manufacturing costs include _________.
manufacturing overhead, direct materials, direct labor
Direct materials costs are recorded on the job cost sheet when the __________.
materials are issued to the job
An allocation base is a(n) _________.
measure of activity used to assign overhead costs to products and services
The predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find ________.
overhead applied to the job
The total cost of a job is calculated by adding the total of direct labor cost, direct materials cost, and _______.
predetermined manufacturing overhead cost
The formula for applying overhead to a specific job is ____________ amount of allocation base incurred by job.
predetermined overhead rate X
When all of a company's job cost sheets are viewed collectively, they form what is known as a(n) _________ _________.
subsidiary ledger