ACC212: Chapter 2
A company's calculated predetermined overhead rate is $90 per direct labor hour. If a job requires 4 direct labor hours, ______.
$360 is assigned to the job to cover indirect costs
True or false: Job-order costing can only be used in manufacturing firms.
False
True or false: Materials purchases are initially recorded in Raw Materials and then all materials used are transferred to Work in Process.
False
True or false: The cost of each individual unit is tracked to products under both job order and process costing.
False
What document specifies the type and quantity of direct materials used on a specific job?
Materials Requisition Form
What is the formula for applying overhead to a specific job?
Predetermined overhead rate × the actual cost driver usage for the specific job
Which of the following is not a manufacturing cost category?
Selling & administrative costs
Murphy Manufacturing estimated $100,000 in manufacturing overhead and 5,000 direct labor hours for 2016. Actual overhead for the year was $120,000 and 7,500 actual direct labor-hours were used. How much overhead was applied to a job completed during 2016 that used 200 direct labor-hours?
The predetermined overhead rate = $100,000/5,000 direct labor-hours = $20 per direct labor-hour. The overhead applied to the job = $20 per direct labor-hours × 200 direct labor-hours = $4,000.
A cost driver is ______.
a measure that explains or influences the amount of manufacturing overhead cost incurred
As jobs are worked on, the Work in Process account accumulates ______.
actual direct materials, actual direct labor, and applied overhead costs
The first step in assigning manufacturing overhead is to determine the __________ _________ or cost driver.
allocation base
A direct labor time ticket includes the ______.
amount of time spent on each job job numbers of jobs worked on
Predetermined overhead rates are ______.
based on some secondary allocation measure
When is the predetermined overhead rate calculated?
before the period begins
Finished goods ______.
consists of completed, unsold goods
Job-order costing would most likely be used in a(n) ______.
construction company
Materials requisition forms are used to ______.
control the flow of materials from inventory into production record the cost of raw materials in the accounting system
When calculating a predetermined overhead rate, the ideal allocation base should be a(n)
cost driver
When goods are sold to customers, ______.
costs are transferred from Finished Goods to Cost of Goods Sold
Categories of manufacturing costs include ______.
direct labor direct materials manufacturing overhead
The document used to record the time workers spend on each job and task is a ______.
direct labor time ticket
To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the ______.
estimated total cost driver
A predetermined overhead rate is calculated by dividing the ______ total manufacturing overhead by the ______ total cost driver.
estimated, estimated
True or false: A predetermined overhead rate of $50 per direct labor hour means that the total cost of direct labor and indirect cost equals $50 per hour.
false
A predetermined overhead rate of $20 per direct labor hours means that ______.
for each direct labor hour, $20 is added to cover indirect costs
The predetermined overhead rate is multiplied by the actual cost driver usage for a job to calculate the ______ the job.
overhead applied to
All materials that will be used in future production are first recorded in the __________ __________ inventory account.
raw materials
The major difference between job order and process costing is ______.
whether the products produced are similar or different
Costs of partially completed units are accounted for in ______.
work in process
An allocation base is a(n) ______.
measure of activity used to assign overhead costs to products and services