Accounting 2 Chapter 2
Bill of Materials
A document that lists the type and quantity of each type of direct material needed to complete a unit of product
Materials Requisition Form
A 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.
Cost Driver
A factor such as machine-hours, beds occupied, computer time, or flight-hours that causes overhead costs
Allocation Base
A measure such as direct labor-hours (DLH) or machine-hours (MH) that is used to assign overhead costs to products and services.
Absorption Costing
All manufacturing cost, both fixed and variable, are assigned to units of product-- units are said to fully absorb manufacturing costs.
Time Ticket
An hour-by-hour summary of the employee's activities throughout the day
When is the predetermined overhead rate computed?
Before the period begins
Finished Goods
Completed units of product that have not yet been sold to customers.
Work in Process
Consists of units of product that are only partially complete and will require further work before they are ready for sale to the customer.
The amount transferred from Work in Process to Finished Goods is referred to as the...?
Cost of Goods manufactured
What are the most widely used allocation bases in manufacturing?
Direct Labor-Hours, Machine-Hours, Direct Labor Costs, and Units of Product.
Cost of Goods Manufactured
Includes the manufacturing costs associated with the goods that were finished during the period
Product Costs
Raw materials purchases, direct labor, manufacturing overhead
Job-Oder Costing
Used in situations where many different products are produced each period.
Raw Materials
`Any materials that go into the final product
Job cost sheet
Records the materials, labor, and manufacturing overhead costs charged to that job.
Period Costs
Selling and administrative