Chapter 3
Manufacturing overhead costs:
-Are indirect costs -Consist of many different items
A job cost sheet contains
-Labor costs charged to the job -Manufacturing overhead costs charged to the job -Materials costs charged to the job
What categories do companies generally classify manufacturing costs?
-Manufacturing Overhead -Direct Materials -Direct Labor
Steps for calculating direct materials on the schedule of cost of goods manufactured in order
1. Raw materials inventory, beginning 2. Add: Purchases of raw materials 3. Total raw materials available 4. Deduct: Raw materials inventory, ending 5. Raw materials used in production 6. Deduct: Indirect materials included in manufacturing overhead
Manufacturing overhead consists of:
All manufacturing costs other than direct materials.
Indirect labor
Categories of costs contain labor charges that cannot be easily traced to a job.
The journal entry that debits Work in Process and Manufacturing overhead and credits Salaries and Wages Payable is recording:
Direct and Indirect labor costs
Which of the following costs can be directly traced to a particular product?
Direct labor
What kind of costs are assigned to units of product in absorption costing
Fixed and variable manufacturing costs
Formula for applying overhead to a specific job
Predetermined overhead rate x Amount of allocation base incurred by job
An ______ _______ pool relates to a single activity measure in the activity-based approach.
activity cost
Labor costs that are easily traced to a job are called ______ _______ _______.
Direct labor costs
To calculate a predetermined overhead rate, divide estimated manufacturing by:
Estimated allocation base
______ ______ consist of any materials that go into the finished product.
Raw materials