Chapter 2 Acct 202
Based on this information, the overhead applied to Job ABC using multiple predetermined overhead rates is ______.
$2.40 × 17 + $1.80 × 13 = $64.20
Based on this information, the predetermined overhead rate per direct labor dollar is ______.
2
Based on this information, the predetermined overhead rate per direct labor hour is $
3
Based on this information, the overhead applied to Job ABC using multiple predetermined overhead rates is $
82.80
Job XYZ has a total manufacturing cost of $600. If the mark-up percentage is 40%, the job will sell for $
840
Based on this information, the amount of overhead allocated to a job that used 300 direct labor hours is
900
Which of the following would not be a good allocation base for manufacturing overhead?
Accounting hours
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.
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 manufacturing cost category?
Selling & administrative costs
Murphy Manufacturing estimated total manufacturing overhead for the year to be $100,000 and that 5,000 direct-labor hours would be used. Actual overhead was $120,000 and actual direct labor-hours were 7,500. The overhead applied to a job completed during the year that used 200 direct labor-hours was ______.
The predetermined overhead rate = $100,000 ÷ 5,000 direct labor-hours = $20 per direct labor-hour × 200 direct labor-hours = $4,000.
Which of the following would not be considered a direct labor cost in a service firm that uses job-order costing?
The salary of the manager at a hair salon
Which of the following would not be considered a job in a service firm that uses job-order costing?
The tax department in an accounting firm
One reason to use a predetermined overhead rate is to eliminate the effect of seasonal factors.
True
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
When a company creates overhead rates based on the actions it performs, it is employing an approach called __________-__________ costing
activity based
A measure such as direct labor-hours or machine hours used to assign overhead costs to products and services is called a cost driver or a(n) _______ __________
allocation base
The total cost of a job is calculated by adding the total of direct labor cost, direct materials cost and ______
applied manufacturing overhead cost
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
Costs 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
Job-order costing would most likely be used in a(n) ______.
construction company
The adjustment for overapplied overhead ______ net income.
decreases cost of goods sold and increases
When a company uses a departmental approach rather than a plantwide approach to applying overhead, the selling price of the product will always be ______.
different
The total cost of a job includes ______.
direct labor cost direct materials cost applied manufacturing overhead
Categories of manufacturing costs include ______.
direct materials manufacturing overhead direct labor
The appeal of using predetermined departmental overhead rates is they presumably provide ______.
enhanced information for decision making a more accurate accounting of costs
To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the ______.
estimated total allocation base
The formula for a predetermined overhead rate is ______.
estimated total manufacturing overhead cost ÷ estimated total allocation base
In a system that uses multiple predetermined overhead rates, overhead is applied ______.
in each department as jobs proceed through the department
The adjustment for underapplied overhead ______ net income.
increases cost of goods sold and decreases
Manufacturing overhead ______.
is an indirect cost consists of many different types of costs contains fixed costs
The document that records the materials, labor, and manufacturing overhead costs charged to a job is the ______.
job cost sheet
Typical cost drivers include ______.
machine-hours flight-hours computer time
Factory labor charges that cannot be easily traced to a job are treated as ______
manufacturing overhead
Labor charges that cannot be easily traced to a job are considered ______.
manufacturing overhead indirect labor
Manufacturing overhead consists of ______.
many different kinds of indirect costs
Companies that use job-order costing make ______.
many different products
Direct materials costs are recorded on the job cost sheet when the ______.
materials are issued to the job
When compared to a departmental approach, using activity-based costing results in ______ overhead rates.
more
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 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
A multiple predetermined overhead rate system is more accurate than a plantwide overhead rate system because it ______.
reflects differences in how overhead costs are incurred within departments
When all of a company's job cost sheets are viewed collectively, they form what is known as a(n)
subsidiary ledger
When all of a company's job cost sheets are viewed collectively, they form what is known as a(n) ______.
subsidiary ledger
Widely used allocation bases in manufacturing include ______.
units of product direct labor cost direct labor hours machine hours
Costs assigned to units of product under absorption costing include ______.
variable manufacturing fixed manufacturing