Accounting Chapter 2

companies assign costs to products services to: A) understand product profitability B) determine the best supplier of raw materials C) value ending inventory D) establish selling prices

A, C, D

manufacturing overhead: A) consists of many different types of costs B) is directly traceable to units produced C) is an indirect costs D) contains fixed costs

A, C, D

which of the following would not be a good allocation base for manufacturing overhead? A) accounting hours B) machine hours C) direct labor hours D) units of product

accounting hours

The total cost of a job is calculated by adding the total of direct labor cost, direct materials cost, and ----------

applied manufacturing overhead cost

allocation bases that do not drive overhead costs

can cause product costs to be distorted

an allocation base should be

cost driver

the total cost of a job includes (3)

direct labor cost, applied manufacturing overhead, direct materials cost

in a system that uses multiple predetermined overhead rates, overhead is applied

in each department as jobs proceed through the department

direct materials costs are recorded on the job cost sheet when the

materials are issues to the job

when all overhead is assigned using direct-labor hours, the company has chosen to use a(n) -------- predetermined overhead rate

plantwide

an hour-by-hour summary of an employee's activities throughout the day is found on the ---- -----

time ticket

the average manufacturing overhead cost per unit tends to -------

vary from one period to the next

materials requisitions forms are used for: A) making journal entries in accounting records B) specifying the cost of materials to be ordered C) summarizing the cost of a job D) controlling the flow of materials into product

A and D

the formula for a predetermined overhead rate is

Estimated manufacturing overhead cost divided by estimated allocation base

when a company creates overhead rates based on the actions it performs, it is employing an approach called ---- ----- costing

activity-based

A measure such as direct labor hours, or machine hours that is used to assign overhead costs to products and services is called a cost driver or an ------ -----

allocation based

to calculate the unit product cost using the job cost sheet

divide the total job cost by the number of units produced

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

a multiple predetermined overhead rate system is more accurate than a plant-wide overhead rate system because it -----------

reflects differences in how overhead costs are incurred within departments

in the formula Y = a + bX, X represents the estimated --------------

total amount of allocation base