Chapter 2

A job cost sheets include

-labor costs charged to the job -materials costs charged to the job -manufacturing overhead costs charged to the job

The type and quantity of each type of direct material needed to complete a unit of product is listed on

bill of materials

Predetermined Overhead Rate Per Direct labor hour

Estimated MOH % Estimated DLH

formula for predetermined overhead rate

Estimated manufacturing OH % by estimated allocation base

Overhead Allocation

assign OH costs to products

the manufacturing overhead account contains

indirect cost (difficult to trace) fixed manufacturing overhead (stays the same)

Why do companies use a predetermined OH rate rather than an actual OH rate?

An actual OH rate is not known until the end of the peiod

Categories of manufacturing costs include

Direct labor Direct materials manufacturing overhead

time ticket

hour-by-hour summary of the employee's activities throughout the day

Manufacturing overhead & Indirect labor

labor charges that CAN'T be easily traced to a job

allocation base is

measure of activity used to assign OH costs to products and services

The formula for applying overhead to specific job

predetermined overhead rate x amount of the allocation base incurred by the job

Companies that use job-order costing make

many different products

The total cost of a job includes:

-Direct Materials Cost -Direct Labor Cost -Applied Manufacturing Overhead

The unit product cost is the same as

AVG. product cost per unit total job cost divided by number of units

All manufacturing costs are assigned to units of product and all nonmanufacturing costs are treated as period costs under ____ costing.

Absorption

Jones company uses a job order costing system with a predetermined overhead rate of 120% of direct labor cost. the job cost sheet for job #420 showed that jones company spent $4,000 on direct materials and $5,000 on direct labor. what is the total cost of the job?

Cost of job= Direct materials + Direct labor + Predetermined OH rate x Direct labor cost $4,000 + $5,000 + 120% x 5,000 = %15,000

Jones company uses a job-order costing system with a predetermined overhead rate of 120% of direct labor cost. The job costs sheet for job #420 listed $4,000 in direct materials cost and $5,000 in direct labor cost to manufacture 7,500 units. The unit cost of job #420 is?

Total cost of Job #420= Direct materials + Direct Labor + OH (predetermined overhead rate x direct labor costs) = $4,000 + $5,000 + 1.20 x $5,000 = $15,000 Unit product cost = $15,000/7,500 units= $2.00 per unit

widely used allocation bases in manufacturing are

direct labor costs direct labor hrs machine hrs units of products

Materials requisition forms are used for

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. *Controls the flow of materials into production *Making journal entries in accounting records

total Manufacturing OH costs tend to

remain fairly constant