Ch 2 - Job-Order Costing: Calculating Unit Product Costs
using a departmental approach to overhead application results in ___ as using a plantwide rate
a different selling price
a factor that causes overhead costs is called a
cost driver
the average manu overhead cost per unit tends to
vary from one period to the next
allocation bases that do not drive overhead costs
will not accurately measure the cost of overhead used
which of the following would not be a good allocation base for manu overhead
accounting hours
a bill of materials contains the ___
quantity of each direct material needed to complete a unit of product, type of each direct material needed to complete a unit of product
total manu overhead costs tend to:
remain fairly constant
one reason to use a predetermined overhead rate is to eliminate the effect of seasonal factors
true
Jones Company uses a job-order costing system with a predetermined overhead rate of 120% of direct labor cost. The job cost sheet for Job #420 listed $4,000 in direct materials cost and $5,000 in direct labor cost to manufacture 7,500 units. The unit cost of Job #420 is ______.
$2
Murphy Manufacturing estimated total manufacturing overhead for 2017 to be $100,000 and uses direct labor-hours as the allocation base. They estimated that 5,000 hours would be used. Actual overhead for 2017 was $120,000 and actual direct labor-hours were 7,500. How much overhead was applied to a job completed during 2017 that used 200 direct labor-hours?
$4,000
Job XYZ has a total manu cost of $600. If the markup percentage is 40%, the job will sell for $___
840
costs assigned to units of product in absorption costing include ___ manu costs
both fixed and variable
the difference between direct labor and indirect labor is that direct labor
can be easily traced to jobs while indirect labor cannot
job-order costing would most likely be used in a(n)
construction company
the adjustment for overapplied overhead
decreases cost of goods sold and increases net operating income.
widely used allocation bases in manu include
direct labor hours, machine hours, direct labor cost, units of product
categories of manu costs include
direct materials, direct labor, manu overhead
to calculate the unit product cost using the job cost sheet
divide the total job cost by the number of units produced
Costs assigned to units of product under absorption costing include
fixed manu, variable manu
in a system that uses multiple predetermined overhead rates, overhead is applied
in each dept as jobs proceed through the dept
the adjustment for underapplied overhead
increases the COGS and decreases the net income
manufacturing overhead
is an indirect costs, contains fixed costs, consists of many different types of costs
the document that records the material, labor, and manu overhead cots charged to a job is the
job cost sheet
manu overhead consists of
many different kinds of indirect costs
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
when compared to a departmental approach, using activity-based costing using results in ___ overhead rates
more
which of the following would be considered direct materials in a service firm that uses job-order costing
paperwork at a law firm
which of the following is not a manu cost category
selling and admin costs
when all of a company's job cost sheets are viewed collectively, they form what is known as a(n)
subsidiary ledger
which of the following would not be considered a job in a service firm that uses job-order costing?
the tax dept in an accounting firm
why do companies use a predetermined overhead rate rather than an actual overhead rate?
an actual overhead rate is not known until the end of the period
the process used to assigned overhead costs to products is called overhead ___
application
the total cost of a job is calculated by adding the total of direct labor, direct materials and
applied manu overhead cost
the total cost of a job includes
applied manu overhead, direct materials cost, direct labor costs
overhead application is the process of
assigning manu overhead cost to jobs
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 materials needed to complete a unit of product is listed on the
bill of materials
an allocation base should be
cost driver
labor costs that are easily traced to a job are called ___ labor costs
direct
companies that make many different products each period use ___ - ___ costing
job order
when compared to a departmental approach, using activity-based costing usually results in
more
compared to a plantwide overhead rate system, a multiple predetermined overhead rate system is
more complex, but more accurate
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 * amount of allocation base incurred by job
a cost driver is
a factor that causes overhead costs to occur
cost-plus pricing occurs when
a markup percentage is added to the cost of a job
the appeal of using predetermined departmental overhead rates is they presumably provide
a more accurate accounting of costs, enhanced info for decision making
when a company creates overhead rate based on the actions it performs, it is employing an approach called ___ - ___ costing
activity based