Chapter 19

Materials ledger card

A perpetual record that is updated each time units of raw material are purchased and issued for use in production.

Job cost sheet

A separate record maintained for each job in a job order costing system; it shows the costs of direct materials, direct labor, and overhead for each job.

Time ticket

A source document that is used to report how much time an employee spent working on a job or on overhead activities and the labor costs to assign to jobs or overhead.

Materials requisition

A source document that production managers use to request materials needed for manufacturing and that is used to assign materials costs to specific jobs or to overhead.

Work In Process Inventory

An asset account where costs are accumulated while jobs are being produced.

Finished Goods Inventory

An asset account where costs of completed jobs reside until the jobs are delivered to customers.

Cost accounting system

Records manufacturing activities using a perpetual inventory system.

Underapplied overhead

The amount by which actual overhead incurred in a period exceeds the overhead applied to jobs with the predetermined overhead rate.

Overapplied overhead

The amount by which the overhead applied to jobs in a period with the predetermined overhead rate exceeds the actual overhead incurred in a period.

Job order costing system

The production of products in response to special orders; also called customized production.

Predetermined overhead rate

The rate established prior to the beginning of a period that relates estimated overhead to an allocation factor such as estimated direct labor and is used to assign overhead cost to a job.

Age

What goes up and doesn't come back down?