administrative cost advertising cost also known as period cost. Show The direct materials required to manufacture each unit of product are listed on a ________. In the cost formula (Y = a + bX) that is used to estimate the total manufacturing overhead cost for a given period, the letter “a” refers to the estimated ________. total fixed manufacturing overhead cost predetermined overhead rate = Estimated total manufacturing overhead cost / estimated total amount of the allocation base. Predetermined overhead rates - Depreciation - Utilities - Indirect labor. - Indirect materials. -Direct labor - hours - Direct labor cost - machine hours - Units of product. - manufacturing overhead cost. Predetermined overhead rates 4 steps : Step 1: Estimate the total amount of the allocation base (the denominator) Step 2: Estimate the total fixed manufacturing overhead cost for the coming period and the variable manufacturing overhead cost per unit of the allocation base. Step 3: Use the cost formula (Y = a + bX) to estimate the total manufacturing overhead cost for the coming period. (the numerator) Step 4: Compute the predetermined overhead rate by diving the numerator by the monitor. Y = estimated total manufacturing overhead cost. a = estimated total fixed manufacturing overhead cost. b = estimated Variable manufacturing overhead cost per unit of allocation base. X= Estimated Total amount of allocation base. The management of Blue Ocean Company estimates that 50,000 machine-hours will be required to support the production planned for the year. It also estimates $300,000 of total fixed manufacturing overhead cost for the coming year and $4 of variable manufacturing overhead cost per machine-hour. What is the predetermined overhead rate? $10.00 per machine hour. (Y = a + bX) a= $300,000 b= $4 X = 50,000 Y= 300,000 + 4(50,000) = 500,000 Estimated total manufacturing overhead cost / estimated total amount of the allocation base. 500,000 / 50,000 = 10 Spartan Corporation estimates that it will incur $200,000 of total manufacturing overhead cost at an estimated activity level of 10,000 direct labor-hours. What is the amount of manufacturing overhead that would be applied to a job that required 200 direct labor-hours? $4,000 Predetermined overhead rate = $200,000 ÷ 10,000 DLHs = $20 per DLH For 200 DLHs, the manufacturing overhead that would be applied is = $20 per DLH × 200 DLHs = $4,000 Overhead applied to a particular job = Predetermined Overhead Rate X Amount of the allocation base incurred by the job. Overhead cost applied to jobs = predetermined overhead rate X actual amount of the allocation base incurred by the jobs A normal cost system applies overhead to jobs ________. by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job Wilson Products uses a plantwide predetermined overhead rate of $10 per direct labor-hour. Direct material and direct labor associated with Job X23 are $4,000 and $1,200 respectively. If Job X23 used 100 direct labor-hours, what is the total cost assigned to this job? $6,200 Total cost associated with the job = Direct material + Direct labor + Manufacturing overhead applied Total cost associated with the job = $4,000 + $1,200 + ($10 × 100 DLHs) = $6,200 Wilson Products uses a plantwide predetermined overhead rate of $10 per direct labor-hour. Direct material and direct labor associated with Job X23 are $4,000 and $1,200 respectively. If Job X23 used 100 direct labor-hours to produce 50 audio controllers, what is this job’s unit product cost (per audio controller)? $124 total cost assigned / units = unit product cost (per audio controller). 6,200 / 50 = 124 Companies can improve job cost accuracy by using ________. multiple predetermined overhead rates What is the estimated total manufacturing overhead in the Assembly Department? Assembly Packaging Direct labor-hours 5,200 62,000 Machine-hours 68,400 11,900 Total fixed manufacturing overhead cost $ 390,000 $ 419,000 Variable manufacturing overhead per DLH $ 3.75 Variable manufacturing overhead per MH $ 3.00 $595,200 Estimated total manufacturing overhead = $390,000 + ($3.00 per DLH × 68,400 MHs) = $595,200 What is the predetermined overhead rate for the Packing Department? Assembly Packaging Direct labor-hours 5,200 62,000 Machine-hours 68,400 11,900 Total fixed manufacturing overhead cost $ 390,000 $ 419,000 Variable manufacturing overhead per DLH $ 3.75 Variable manufacturing overhead per MH $ 3.00 $10.51 per DLH Predetermined overhead rate = $651,500 ÷ 62,000 DLHs = $10.51 per DLH What is the term used when a company applies less overhead to production than it actually incurs? The adjustment for overapplied overhead ________. decreases cost of goods sold and increases net operating income. When all of a company’s job cost sheets are viewed collectively they form what is known as a ________. Underapplied or overapplied overhead is the: difference between overhead applied to work in process and actual overhead. The adjustment for underapplied overhead : increases cost of goods sold and decreases net income Costs assigned to units of product under absorption costing include: - fixed manufacturing - variable manufacturing Companies that make many different products each period use ____ - _____ costing. True or false: Job-order costing can only be used in manfucaturing firms. A measure such as direct labor-hours or machine hours used to assign overhead costs to products and services is called a cost driver or a(n) _______ ________. Which of the following would not be a good allocation base for manufacturing overhead? - Direct labor hours -Machine hours - Units of product - Accounting hours To calculate a predetermined overhead rate, divide estimated manufacturing overhead by: estimated allocation base. The predetermined overhead rate is calculated: before the period begins. Overhead application is the process of: assigning manufacturing overhead to jobs. In the formula y=a+bX, b represents the estimated: variable manufacturing overhead cost per unit. The formula for applying overhead to a specific job is: Predetermined overhead rate x Amount of allocation base incurred by job. 900. 450,000 / 150,000 = $3.00 per direct labor hour x 300 = $900. True or false: One reason to use a predetermined overhead rate is to eliminate the effect of seasonal factors. The total cost of a job is calculated by adding the total of direct labor cost, direct materials cost and applied manufacturing overhead cost. The process used to assign overhead costs to products is called overhead ______. application (overhead allocation) The predetermiend overhead rate is multipled by the actual allocation base incurred by a job to find : overhead applied to the job. $4000 Explanation: 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 x 200 direct labor hours = $4000 Estimated manufacturing overhead = 450,000 Estimated direct labor hours = 150,000 Actual manufacturing overhead = $405,000 Actual direct labor hours = 180,000 Based on this information, the amount of overhead allocated to a job that used 300 direct labor hours is $______. $450,000 / 150,000 = $3.00 per direct labor hour x 300 = $900. Manufacturing overhead costs: - consists of many different items - are an indirect costs. Categories of manufacturing costs include: - manufacturing overhead - direct materials - direct labor. A bill of materials contains the - type of each direct material needed to complete a unit of product - quantity of each direct material needed to complete a unit of product. Materials requisitions forms are used for: - making journal entries in accounting records - controlling the flow of materials into production. A job cost sheet contains: - labor costs changed to the job - manufacturing overhead costs charged to the job - materials costs charged to the job. Direct materials costs are recorded on the job cost sheet when the: materials are issued to the job. The document used to record the time workers spend on each job and task is called a: To keep track of labor time and cost, many firms have replaced: paper with computerized system The type and quantity of each type of direct material needed tom complete a unit of product is listed on the: The type and quantity of materials to be drawn from the storeroom and the job that will be charged for the materials is specified on the materials requisition form. The document that records the materials, labor, and manufacturing overhead costs charged to a job is the: Barcodes can be used to": automatically record and post direct labor costs to jobs. Labor costs that are easily traced to a job are called _________ labor costs. - consists of many different types of costs - is an indirect cost - contains fixed costs Typical cost drivers include: - flight hours - machine hours - computer time. Job XYZ has a total manufacturing cost of $600. If the markup percentage is 40%, the job will sell for $____. What is the document used to accumulate the costs of a job called?Job cost sheets are the most important job costing document. They summarize all of the key information about the job and accumulate total direct materials costs, total direct labor costs and overhead costs applied to the job to determine the total costs for the job.
What is the purpose of the job cost sheet in a job order costing system?In a job order costing system, a job cost sheet is maintained for each job. It shows information about the total cost of a particular job. Each job sheet breaks the costs down in terms of direct materials, direct labor, and manufacturing overhead assigned to individual jobs.
What is a job cost sheet quizlet?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. job cost sheet. records the materials, labor, and manufacturing overhead costs charged to that job.
Which of the following describes a job cost sheet?Which one of the following best describes a job cost sheet? It is a form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job.
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When all of a companys job cost sheets are viewed collectively they form what is known as a?
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