Accounting 213

The total cost of a job includes:

-Direct Materials Cost -Direct Labor Cost -Applied Manufacturing Overhead

what is another common term for cost driver?

Activity base or Allocation base

the process used to assign overhead cost to products is called overhead ______________

Application / Allocation

manufacturing overhead costs: consist of many different items do not impact the average cost per unit are indirect costs

Consist of many different items and are indirect costs.

Widely ised allocation bases in manufacturing are:

Direct labor hours Units of product Direct labor cost Machine hours

Calculate the unit product cost using the job cost sheet:

Divide the total job cost by the number of units produced

Direct materials and direct labor are both _________ costs

Manufacturing

Factory cost such as cleaning supplies, taxes, insurance, and janitor wages are classified as ________

Manufacturing overhead

A potential benefit that is forfeited or lost when one decision is chosen over another is called

Opportunity cost

Direct materials, Direct labor, and Manufacturing overhead are all___________ costs

Product

Differentail cost is:

The difference in cost between two alternatives Also known as incremental cost

The unit product cost is the same as:

Total job cost/number of units average product price

The bill of materials contains:

Type & quantity of each direct material needed to complete a unit of product

Cost of goods old for a merchandising company, direct materials, and commission are all examples of ________ cost.

Variable

Why do companies use predetermined overhead rate rather than actual overhead rate?

because actual overhead rate is not known until the end of the period

Allocation bases that do not drive the overhead cost:

can cause the product cost to be distorted

The effect of over applied overhead is

decreases cost of goods sold and increases net income

to calculate predetermined overhead rate, divide estimated manufacturing overhead by

estimated allocation base

a typical cost driver includes: machine depreciation flight hours utilities cost machine hours computer time

flight hours, machine hours, and computer time

In a system that uses multiple predetermined overhead rates, overhead is applied:

in each department as jobs proceed through the department

Labor charges that cannot be easily traced to a job are considered

manufacturing overhead and indirect labor

The cost of producing one more unit is known as:

marginal cost

A job cost sheet includes

materials cost charged on the job labor cost charged on the job manufacturing overhead cost charged on the job

the predetermined overhead is multiplied by the estimated total allocation base to find:

overhead applied to the job

A single predetermined overhead rate is called a(n) ___________ overhead rate

plantwide

Inventoriable costs is another term for ____________ cost

product

Total manufacturing overhead cost tends to:

remain fairly constant

what is not a manufacturing cost?

selling and administrative cost

The formula Y=a+bx represents the estimated:

variable manufacturing overhead cost per unit