Acct 2102- SB ch.2
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 showed that Jones Company spent $4,000 on direct materials and $5,000 on direct labor on the job. What is the total cost of Job #420?
$15,000
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 ______.
$4,000
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
SPL Enterprises assigns overhead based on number of machine hours. For the upcoming year, they plan to use a total of 250,000 machine hours and 50,000 direct labor hours. Total overhead cost is expected to be $500,000. The predetermined overhead rate per machine hour is $____
2 (500,000/250,000)
Smith, Inc. uses a job-order costing system with the predetermined overhead rate of $12 per machine-hour. The job cost sheet for Job #42A listed $12,000 in direct labor cost, $18,000 in direct materials cost, 1,200 direct labor-hours and 1,100 machine-hours. The total cost of Job #42A is $______
43,200
Which of the following would not be a good allocation base for manufacturing overhead?
Accounting hours
When a predetermined markup is applied to a base to determine the target selling price, the company is using _____ - ______ pricing.
Cost- Plus
Cost objects include __________.
Customers, departments, and anything for which cost data is desired.
Fantastic Furniture makes custom order couches. The material used to make a couch is a(n) ______ cost of the customer placing the order.
Direct
Which of the following is only true in a multiple predetermined overhead rate system?
Each production department may have its own predetermined overhead rate.
All of a company's depreciation, property taxes, and insurance premiums are considered manufacturing overhead.
False
Which of the following is not a manufacturing cost category?
Selling & administrative costs
Why is the unit product cost different from the cost that would be incurred if another (additional) unit were produced?
The unit product cost is an average, not an incremental cost.
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
All manufacturing costs are assigned to units of product and all nonmanufacturing costs are treated as period cost under ______ costing.
absorption
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 process used to assign overhead costs to products is called overhead ______
application
Manufacturing overhead costs ______.
are indirect costs consist of many different items
Overhead application is the process of ______.
assigning manufacturing overhead cost to jobs
The unit product cost is the same as the ______.
average product cost per unit total job cost divided by number of units
The type and quantity of each type of direct material needed to complete a unit of product is listed on the ______.
bill of materials
A type of indirect cost incurred to benefit more than one cost object is a(n) ______ cost.
common
Costs that are shared by multiple cost objects in a company are known as ______ costs.
common
Nonmanufacturing costs include:
company president's salary sales commissions
Manufacturing overhead:
consists of many different types of costs. contains fixed costs. is an indirect cost.
Job-order costing would most likely be used in a(n) ______.
construction company
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
Costs that can be easily and conveniently traced to a specific product are called ______ costs.
direct
Materials that become an important component of the finished product whose cost can be easily and conveniently traced to the finished product are _____ materials.
direct
The materials that go into the final product are called _______ materials.
direct
In an automobile manufacturing plant, the assembly-line workers are classified as _______ _______cost.
direct labor
To calculate the unit product cost using the job cost sheet ______ by the number of units produced.
divide the total job cost
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
A predetermined overhead rate is calculated by dividing the ______ total manufacturing overhead by the ______ total allocation base.
estimated; estimated
Administrative costs include ______.
executive compensation and public relations costs
Other names for manufacturing overhead include ______.
factory overhead factory burden indirect manufacturing costs
True or false: Labor costs that can be specifically traced to a product are indirect labor costs.
false
Average manufacturing overhead cost per unit usually varies from one period to the next because ______.
fixed manufacturing overhead remains constant in total even when production changes
In a system that uses multiple predetermined overhead rates, overhead is applied ______.
in each department as jobs proceed through the department
A manufacturing cost that cannot be easily traced to a specific cost object is a(n)
indirect
Salaries of factory supervisors and factory maintenance personnel are examples of ______ labor costs.
indirect
Manufacturing overhead costs include ______.
indirect materials, factory supervisors' salaries, and factory depreciation
A dress manufacturer would consider the cost of relatively inexpensive items like thread to be part of ______.
indirect materials, manufacturing overhead
The document that records the materials, labor, and manufacturing overhead costs charged to a job is the Blank______.
job cost sheet
Direct materials and direct labor are both ______ costs.
manufacturing
Factory burden is a synonym for ______ ______
manufacturing overhead
Factory costs such as cleaning supplies, taxes, insurance, and janitor wages are classified as ______.
manufacturing overhead
Factory materials, such as cleaning supplies, that are not components of finished products are classified as ______.
manufacturing overhead
Labor charges that cannot be easily traced to a job are considered ______.
manufacturing overhead indirect labor
The type and quantity of materials to be drawn from the storeroom and the job that will be charged for the materials is specified on the ______.
materials requisition form
An allocation base is a(n) ______.
measure of activity used to assign overhead costs to products and services
A single predetermined overhead rate is called a(n) ______ overhead rate.
plantwide
When all overhead is assigned using direct-labor hours, the company has chosen to use a(n) predetermined overhead rate.
plantwide
The total cost of a job is calculated by adding the total of direct labor cost, direct materials cost, and:
predetermined manufacturing overhead cost.
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
When companies have large amounts of fixed manufacturing overhead, total manufacturing overhead costs tend to ______.
remain fairly constant from one period to the next
An hour-by-hour summary of an employee's activities throughout the day is found on the ______ ______.
time ticket
In the formula Y = a + bX, X represents the estimated ______.
total amount of the allocation base
The unit product cost is the same as the ______.
total job cost divided by number of units average product cost per unit
Direct labor is also called _______ labor.
touch
A cost may be direct or indirect, depending on the cost object.
true
One reason to use a predetermined overhead rate is to eliminate the effect of seasonal factors.
true
The finished product of one company can become raw materials for another company.
true
When a company uses cost-plus pricing, they consider both the costs of production and the desired profit.
true
Allocation bases that do not drive overhead costs ______.
will not accurately measure the cost of overhead used
Which of the following statements are true?
A direct cost can be easily and conveniently traced to a specific cost object. A regional sales manager's salary is a direct cost of the regional office in which the sales manager works.
An allocation base should be:
cost driver
Any item for which cost data is desired is called a(n) _____.
cost object
Manufacturing costs include ______.
direct materials, direct labor, manufacturing overhead
Typical cost drivers include ______.
flight-hours computer time machine-hours
Indirect materials include ______.
nails, glue, and thread
In the formula Y = a + bX, b represents the estimated ______.
variable manufacturing overhead cost per unit
Manufacturing overhead consists of ______.
many different kinds of indirect costs
Compared to a plantwide overhead rate system, a multiple predetermined overhead rate system is ______ accurate.
more complex and more
Manufacturing costs can be divided into three categories: direct ______, _______ labor and manufacturing _______
material, direct, overhead
The formula for applying overhead to a specific job is: ______ amount of allocation base incurred by job.
predetermined overhead rate ×
A cost that can be easily and conveniently traced to a specific cost object is a(n) _________ cost of that cost object, whereas costs that cannot be easily and conveniently traced to that specific cost object are _________ costs. (Enter only one word per blank).
direct, indirect
Direct materials costs are recorded on the job cost sheet when the ______.
materials are issued to the job
The predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find Blank______.
overhead applied to the job
Companies use a predetermined overhead rate rather than an actual overhead rate because ______.
an actual rate is not known until the end of the period
Materials requisition forms are used for ______.
controlling the flow of materials into production making journal entries in accounting records
A factor that causes overhead costs is called a
cost driver
Categories of manufacturing costs include ______.
direct labor direct materials manufacturing overhead
A laptop computer manufacturer would consider the computer's processor chip to be a(n) ______ cost.
direct material
The total cost of a job includes:
direct materials cost. direct labor cost. predetermined manufacturing overhead.
Costs assigned to units of product under absorption costing include:
fixed manufacturing. variable manufacturing.
Companies that use job-order costing make ______.
many different products
The average manufacturing overhead cost per unit tends to ______.
vary from one period to the next
Job XYZ has a total manufacturing cost of $600. If the mark-up percentage is 40%, the job will sell for $ ______.
840
Widely used allocation bases in manufacturing include ______.
machine hours direct labor cost units of product direct labor hours