accounting 2 ch 19

What 3 steps are involved in finding the allocated manufacturing overhead cost?

1. find the total cost of (labor hours, labor$ or machine hours) 2. find the predetermined allocation rate 3. find the allocated manufacturing overhead cost

what are the four types of quality costs?

1. prevention costs(avoidance) 2. appraisal costs(detection) 3. Internal Failure costs (when detection inside) 4. external Failure costs(when detection outside

what is the difference between that total estimated quantity of the overhead allocation base and the actual quantity of the allocation base used?

The total is simply the sum of all the actual quantities of the allocation based used.

What are the three types of way to calculate manufacturing overhead for the year?

activity based managment systems

How would you find the total price to make one unit at the end of the managerial analysis?

add direct materials cost per unit add overhead allocation per unit add direct labor per unit

What is the formula for finding the allocated manufacturing overhead cost?

allocation rate * actual quantity of labor($) for that specific product.

why would a company decide to split up its overhead costs among two department?

because one department may use a lot of direct labor, while the other a lot of overhead.

How would you calculate a plant wide rate to calculate the manufacturing overhead costs?

choose a base (labor costs, labor hours, machine hours) and multiply the # of units by the cost

Whats the first step in determining a predetermined overhead allocation rate?

choose an allocation base for all products (labor hours, labor costs, machine hours)

what is a product cost?

direct materials, direct labor and manufacturing overhead

How do you find the manufacturing overhead cost per unit?

divide allocated overhead manufacturing cost by the # of units.

What happens when a product is moved to finished goods

it applies the costs from the raw and in process inventory and conversion costs.

How does a JIT costing system account for product costs?

it combines raw materials and work in process together and has a finished goods inventory.

What does dividing by the total units do to the total overhead allocation cost?

it shows how much allocation($)is involved with each unit.

What is the key to activity based costing?

paying based on what you order

what is the main goal of a managing system?

to improve production with less cost, becoming more profitable.

What is the formula for the predetermined overhead allocation rate?

total estimated overhead costs/ total estimated quantity of the overhead alloaction (# of units * chosen allocation base)

What is the main goal of manufacturing overhead allocation?

using a direct cost that can be measured, it uses that as a base(is) to divide the amount of overhead is in each amount of direct cost.