ACC 102: Chapter 3
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 (DHL) or machine-hours (MH) that is used to assign overhead costs to products and services
Absorption Costing
All manufacturing costs, both fixed and variable are assigned to units of production, units are said to fully absorb manufacturing costs
Time Ticket
An hour-by-hour summary of the employee's activities through-out the day
Normal Cost System
Applies overhead to jobs by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the jobs
Predetermined Overhead Rate
Computed by dividing the total estimated manufacturing overhead cost for the period by the estimated total amount of the allocation base
Finished Goods
Consist of 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
Schedule of cost of goods manufactured
Contains three elements of product costs, direct labor, direct materials and manufacturing overhead and it summarizes the portions of those costs that remain in ending work in process inventory and that are transferred out of work in process to finished goods
Schedule of cost of good sold
Contains three elements of product costs-direct materials, direct-labor, and manufacturing overhead, and it summarizes the portions of those costs that remain in ending finished goods inventory and that are transferred out of finished goods into cost of goods sold
Cost of Goods Manufactured
Includes the manufacturing costs associeated with the goods that were finished during the period
Overhead Application
Process of assign overhead cost to jobs
Job Cost Sheet
Records the materials, labor, and manufacturing overhead costs charged to that job
Plantwide Overhead Rate
Single predetermined overhead rate for an entire facotry
Underapplied or Overapplied Overhead
The difference between the overhead cost applied to Work In Process and the actual overhead cost of a period
Job-Order Costing
Used in situations where many different products, each with individual and unique features are produced each period.
Multiple Predetermined Overhead Rate
each production department may have its own predetermined overhead rate
