CH. 17 job order costing

Labor time record

a record used to assign direct labor cost to specific jobs.

Predetermined overhead allocation rate

estimated overhead cost per unit of the allocation base, calculated at the beginning of the accounting period. Total estimated overhead costs divided by total estimated quantity of the overhead allocation base.

Job order Costing system

An accounting system that accumulates costs by job. Used by companies that manufacture unique products or provide specialized services.

Under-allocated overhead

Occurs when the actual manufacturing overhead costs are more than allocated manufacturing overhead cost.

Job

The production of a unique product or specialized service. May be one unit or a batch of units.

allocation base

a denominator that links indirect costs to cost objects. Ideally, the allocation base is the primary cost driver of the indirect costs.

job cost record

a document that shows the direct materials, direct labor, and manufacturing overhead costs for an individual job.

Process Costing system

an accounting system that accumulates costs by process. Used by companies that manufacture identical units through a series of uniform production steps or processes.

Over-allocated overhead

occurs when the actual manufacturing overhead costs are less than allocated manufacturing overhead costs.

Materials requisition

request for the transfer of raw materials to the production floor.

cost driver

the primary factor that causes a cost to increase or decrease.