SmartBook 2
Bar codes can be used to ______.
automatically record and post direct labor costs to jobs
The difference between direct labor and indirect labor is that direct labor ______.
can be easily traced to jobs, while indirect labor cannot
Widely used allocation bases in manufacturing include ______.
direct labor hours units of product machine hours direct labor cost
Categories of manufacturing costs include ______.
direct materials, direct labor, manufacturing overhead
To calculate the unit product cost using the job cost sheet ______.
divide the total job cost by the number of units produced
Companies that use job-order costing make ______.
many different products
Direct materials costs are recorded on the job cost sheet when the ______.
materials are issued to the job
The predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find ______.
overhead applied to the job
The document used to record the time workers spend on each job and task is called a ______.
time ticket
In the formula Y = a + bX, a represents the estimated ______.
total fixed manufacturing overhead cost
An hour-by-hour summary of an employee's activities throughout the day is found on the
time ticket
Costs assigned to units of product in absorption costing include ______ manufacturing costs.
both variable and fixed manufacturing
To keep track of labor time and costs, many firms have replaced ______.
paper time tickets with computerized systems
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
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
An allocation base is a(n) ______.
measure of activity used to assign overhead costs to products and services
The average manufacturing overhead cost per unit tends to ______.
vary from one period to the next
What is the most common approach to product costing throughout the world?
Absorption costing
Which of the following would not be a good allocation base for manufacturing overhead?
Accounting hours
Which of the following is not a manufacturing cost category?
Selling & administrative costs
All manufacturing costs are assigned to units of product and all nonmanufacturing costs are treated as period cost under costing
absorption
The process used to assign overhead costs to products is called overhead
allocation
A measure such as direct labor-hours or machine hours used to assign overhead costs to products and services is called a cost driver or a(n)
allocation base
The total cost of a job is calculated by adding the total of direct labor cost, direct materials cost and ______.
applied manufacturing overhead cost
Overhead application is the process of ______
assigning manufacturing overhead cost to jobs
An allocation base should be ______.
cost driver
The document that records the materials, labor, and manufacturing overhead costs charged to a job is the ______.
job cost sheet
Manufacturing overhead consists of ______.
many different kinds of indirect costs
The formula for applying overhead to a specific job is ______.
predetermined overhead rate × amount of allocation base incurred by job
Total manufacturing overhead costs tend to:
remain fairly constant
Manufacturing overhead costs ______.
consist of many different items are indirect costs
True or false: The root cause of inaccurately assigning costs to jobs is generally due to poor tracking of direct labor costs.
false
Job-order costing would most likely be used in a(n) ______.
construction company
In the formula Y = a + bX, X represents the estimated ______.
total amount of the allocation base
A normal costing system applies overhead by job by multiplying a(n) ______ ______ rate by the _______ amount of the allocation base incurred by the job.
predetermined overhead, actual
The total cost of a job includes ______.
-Direct Materials Cost -Direct Labor Cost -Applied Manufacturing Overhead
Cost-plus pricing occurs when ______.
a markup percentage is added to the cost of a job
A normal cost system assigns overhead to jobs using ______.
a predetermined overhead rate
A SERVICE firm that would most likely use job-order costing is a ______. Multiple choice question.
law practice
Typical cost drivers include ______
machine-hours, flight-hours, computer time
Factory labor charges that cannot be easily traced to a job are treated as ______.
manufacturing overhead
Labor charges that cannot be easily traced to a job are considered ______.
manufacturing overhead indirect labor
Materials requisition forms are used for ______.
- Making journal entries in accounting records - Controlling the flow of materials into production
A job cost sheet contains ______.
- materials costs charged to the job - manufacturing overhead costs charged to the job - labor costs charged to the job
Labor costs that are easily traced to a job are called ______ laor costs
direct
Manufacturing overhead ______.
- consists of many different types of costs - contains fixed costs i- s an indirect cost
A bill of materials contains the ______.
- quantity of each direct material needed to complete a unit of product - type of each direct material needed to complete a unit of product
Why do companies use a predetermined overhead rate rather than an actual overhead rate?
An actual overhead rate is not known until the end of the period.
The type and quantity of each type of direct material needed to complete a unit of product is listed on the ______.
bill of materials
The United States requires absorption costing for ______ financial reports.
external
True or false: Job-order costing can only be used in manufacturing firms.
false
Companies that make many different products each period use ______________ costing
job-order
Factory labor charges that cannot be easily traced to a job are treated as ______
manufacturing overhead
In the formula Y = a + bX, b represents the estimated ______.
variable manufacturing overhead cost per unit