Unit 4 Normal Costing Concepts
The use of normal costing means that actual overhead costs are assigned directly to jobs.
False
The predetermined overhead rate is usually calculated
at the beginning of the year.
Manufacturing overhead
consists of all manufacturing costs other than direct materials and direct labor.
Which method of measuring costs associated with production is more widely used in practice?
normal costing
Which of the following is the assignment process used with normal costing?
Actual direct material and direct labor costs are assigned to products, but overhead costs are assigned using predetermined rates.
Production costs do not include
All of these are production cost.
Actual overhead is reconciled with applied overhead at the beginning of the period.
False
In a normal costing system, actual overhead is used to arrive at the cost of goods manufactured.
False
In an actual cost system, actual direct materials, actual direct labor and estimated overhead are used to determine unit cost.
False
Which of the following is not true about job-order costing?
It is used in firms that produce homogeneous products.
Which of the following statements is true about overhead?
Overhead costs are not incurred uniformly throughout the year.
If actual overhead is greater than applied overhead, the variance is called underapplied overhead.
True
Production costs consist of direct materials, direct labor, and overhead.
True
The difference between actual overhead and applied overhead is called an overhead variance.
True
The key feature of job-order costing is that the cost of one job differs from that of another job and must be kept track of separately.
True
The three manufacturing cost elements are direct materials, direct labor, and overhead.
True
A normal job-order costing system is a system that uses:
actual costs for direct materials and direct labor and estimated costs for overhead.
Using normal costing requires that
actual overhead costs are not assigned directly to jobs.
Which of the following are easy to trace to individual jobs?
direct materials and direct labor
