Chapter 2
A job cost sheets include
-labor costs charged to the job -materials costs charged to the job -manufacturing overhead costs charged to the job
The type and quantity of each type of direct material needed to complete a unit of product is listed on
bill of materials
Predetermined Overhead Rate Per Direct labor hour
Estimated MOH % Estimated DLH
formula for predetermined overhead rate
Estimated manufacturing OH % by estimated allocation base
Overhead Allocation
assign OH costs to products
the manufacturing overhead account contains
indirect cost (difficult to trace) fixed manufacturing overhead (stays the same)
Why do companies use a predetermined OH rate rather than an actual OH rate?
An actual OH rate is not known until the end of the peiod
Categories of manufacturing costs include
Direct labor Direct materials manufacturing overhead
time ticket
hour-by-hour summary of the employee's activities throughout the day
Manufacturing overhead & Indirect labor
labor charges that CAN'T be easily traced to a job
allocation base is
measure of activity used to assign OH costs to products and services
The formula for applying overhead to specific job
predetermined overhead rate x amount of the allocation base incurred by the job
Companies that use job-order costing make
many different products
The total cost of a job includes:
-Direct Materials Cost -Direct Labor Cost -Applied Manufacturing Overhead
The unit product cost is the same as
AVG. product cost per unit total job cost divided by number of units
All manufacturing costs are assigned to units of product and all nonmanufacturing costs are treated as period costs under ____ costing.
Absorption
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. what is the total cost of the job?
Cost of job= Direct materials + Direct labor + Predetermined OH rate x Direct labor cost $4,000 + $5,000 + 120% x 5,000 = %15,000
Jones company uses a job-order costing system with a predetermined overhead rate of 120% of direct labor cost. The job costs 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?
Total cost of Job #420= Direct materials + Direct Labor + OH (predetermined overhead rate x direct labor costs) = $4,000 + $5,000 + 1.20 x $5,000 = $15,000 Unit product cost = $15,000/7,500 units= $2.00 per unit
widely used allocation bases in manufacturing are
direct labor costs direct labor hrs machine hrs units of products
Materials requisition forms are used for
document that specifies the type and quantity of materials to be drawn from the storeroom and identifies the job that will be charged for the cost of the materials. *Controls the flow of materials into production *Making journal entries in accounting records
total Manufacturing OH costs tend to
remain fairly constant