Ch. 2

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The total cost of a job includes:

- applied manufacturing overhead - direct labor cost - direct materials cost

Which of the following would not be a good allocation base for manufacturing overhead?

Accounting hours are not related to manufacturing

Widely used allocation bases in manufacturing are:

Direct labor costs, machine hours, Direct labor hours, units of product

The document that records the materials, labor, and manufacturing overhead costs charged to a job is the :

Job cost sheet

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

Overhead applied to the job

The formula for applying overhead to a specific job is:

Predetermined overhead rate x Amount of allocation base incurred by job

A cost driver is:

a factor that causes overhead costs to occur

A measure such as direct labor hours, or machine hours that is used to assign overhead costs to products and services is called a cost driver or a(n)

allocation base

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

application

Overhead application is the process of

assigning manufacturing overhead costs to jobs.

Categories of manufacturing costs include:

direct materials, direct labor, manufacturing overhead

to calculate a prediction overhead rate, divide estimated manufacturing overhead by:

estimated allocation base

Typical cost drivers include:

machine-hours, flight-hours, computer time

The manufacturing overhead account contains:

many different kinds of indirect costs

A job cost sheet contains:

materials costs charged to the job Manufacturing Overhead costs charged to the job Labor costs charged to the job.

The difference between direct labor and indirect labor is that direct labor:

can be easily traced to jobs, while indirect labor cannot.

an allocation base should be

cost driver

An allocation base

measure of activity used to assign overhead costs to products and services.

an hour-by-hour summary of the employee's activities throughout the day is found on the

time ticket

In the formula y=a+bX, b represents the estimated:

variable manufacturing overhead cost per unit

The average manufacturing overhead cost per unit tends to:

vary from one period to the next

The Process used to assign overhead costs to products is called overhead

Allocation

Formula for applying overhead to a specific job is:

predetermined overhead rate x amount of allocation base incurred by job


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