ACCT2210 CH 2

A normal cost system applies overhead to jobs ________. - by multiplying a predetermined overhead rate by the estimated amount of the allocation base incurred by the job - by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job - using the actual amount of overhead caused by each job - using the normal amount of overhead caused by each job

- by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job

Used to keep track of the materials, labor, and manufacturing overhead costs charged to each job

A job cost sheet

Identifies the materials drawn from the storeroom that must then be charged to each job.

A materials requisition form

Total cost associated with the job formula

Direct material + Direct labor + Manufacturing overhead applied

The management of Blue Ocean Company estimates that 50,000 machine-hours will be required to support the production planned for the year. It also estimates $300,000 of total fixed manufacturing overhead cost for the coming year and $4 of variable manufacturing overhead cost per machine-hour. What is the predetermined overhead rate? $6.00 per machine hour $8.00 per machine hour $10.00 per machine hour $12.50 per machine hour

Estimated total overhead cost = $300,000 + ($4 per MH × 50,000 MHs) = $500,000 Predetermined overhead rate = Estimated total overhead cost of $500,000 ÷ 50,000 MHs = $10 per MH

Spartan Corporation estimates that it will incur $200,000 of total manufacturing overhead cost at an estimated activity level of 10,000 direct labor-hours. What is the amount of manufacturing overhead that would be applied to a job that required 200 direct labor-hours? $2,000 $4,000 $6,000 $10,000

Predetermined overhead rate = $200,000 ÷ 10,000 DLHs = $20 per DLH For 200 DLHs, the manufacturing overhead that would be applied is = $20 per DLH × 200 DLHs = $4,000

Wilson Products uses a plantwide predetermined overhead rate of $10 per direct labor-hour. Direct material and direct labor associated with Job X23 are $4,000 and $1,200, respectively. If Job X23 used 100 direct labor-hours, what is the total cost assigned to this job? $5,000 $5,200 $6,000 $6,200

Total cost associated with the job = Direct material + Direct labor + Manufacturing overhead applied Total cost associated with the job = $4,000 + $1,200 + ($10 × 100 DLHs) = $6,200

Wilson Products uses a plantwide predetermined overhead rate of $10 per direct labor-hour. Direct material and direct labor associated with Job X23 are $4,000 and $1,200, respectively. If Job X23 used 100 direct labor-hours to produce 50 audio controllers, what is this job's unit product cost (per audio controller)? $52 $62 $100 $124

Total cost associated with the job = Direct material + Direct labor + Manufacturing overhead applied Total cost associated with the job = $4,000 + $1,200 + ($10 × 100 DLHs) = $6,200 Unit product cost = Total cost associated with the job ÷ Number of units Unit product cost = $6,200 ÷ 50 Units = $124

Unit product cost formula

Total cost associated with the job ÷ Number of units

What is the term used when a company applies less overhead to production than it actually incurs? - Misapplied - Overapplied - Unadjusted - Underapplied

Underapplied

The cost formula used to estimate the total manufacturing overhead cost for a given period is

Y = a + bX

The direct materials required to manufacture each unit of product are listed on a ________. bill of materials materials requisition form materials ticket job order cost sheet

bill of materials

The adjustment for overapplied overhead ________. decreases cost of goods sold and decreases net operating income decreases cost of goods sold and increases net operating income. increases cost of goods sold and decreases net operating income increases cost of goods sold and increases net operating income.

decreases cost of goods sold and increases net operating income

Y = a + bX where, X =

he estimated total amount of the allocation base.

Companies can improve job cost accuracy by using ________. - a plant wide overhead rate - direct-labor hours to apply overhead - multiple predetermined overhead rates -number of units in the job to apply overhead

multiple predetermined overhead rates

Y = a + bX where, a=

the estimated total fixed manufacturing cost

Y = a + bX where, Y =

the estimated total manufacturing overhead cost

Y = a + bX where, b =

the estimated variable manufacturing overhead cost per unit of the allocation base

In the cost formula (Y = a + bX) that is used to estimate the total manufacturing overhead cost for a given period, the letter "a" refers to the estimated ________. total manufacturing overhead cost total fixed manufacturing overhead cost variable manufacturing overhead cost per unit of the allocation base total amount of the allocation base

total fixed manufacturing overhead cost