Chapter 3

Manufacturing overhead costs:

-Are indirect costs -Consist of many different items

A job cost sheet contains

-Labor costs charged to the job -Manufacturing overhead costs charged to the job -Materials costs charged to the job

What categories do companies generally classify manufacturing costs?

-Manufacturing Overhead -Direct Materials -Direct Labor

Steps for calculating direct materials on the schedule of cost of goods manufactured in order

1. Raw materials inventory, beginning 2. Add: Purchases of raw materials 3. Total raw materials available 4. Deduct: Raw materials inventory, ending 5. Raw materials used in production 6. Deduct: Indirect materials included in manufacturing overhead

Manufacturing overhead consists of:

All manufacturing costs other than direct materials.

Indirect labor

Categories of costs contain labor charges that cannot be easily traced to a job.

The journal entry that debits Work in Process and Manufacturing overhead and credits Salaries and Wages Payable is recording:

Direct and Indirect labor costs

Which of the following costs can be directly traced to a particular product?

Direct labor

What kind of costs are assigned to units of product in absorption costing

Fixed and variable manufacturing costs

Formula for applying overhead to a specific job

Predetermined overhead rate x Amount of allocation base incurred by job

An ______ _______ pool relates to a single activity measure in the activity-based approach.

activity cost

Labor costs that are easily traced to a job are called ______ _______ _______.

Direct labor costs

To calculate a predetermined overhead rate, divide estimated manufacturing by:

Estimated allocation base

______ ______ consist of any materials that go into the finished product.

Raw materials