Ch. 4 Flashcards
(20 cards)
actual costing
a costing system that traces direct costs to a cost object by using the actual direct cost rates times the actual quantities of the direct cost inputs
actual indirect-cost rate
calculated by dividing actual total indirect costs in the pool by the actual total quantity of the cost-allocation base
adjusted allocation-rate approach
restates all OH entries in the general ledger and subsidiary ledgers using actual cost rates rather than budgeted cost rates
budgeted indirect-cost rate
(budgeted annual indirect costs)/(budgeted annual quantity of the cost-allocation base)
cost-allocation base
a systematic way to link an indirect cost or group of indirect costs to cost objects
cost-application base
when the cost object is a job, product, or customer, the cost allocation base is called a cost application base
cost pool
grouping of individual indirect cost items
job
a product or service
job-cost record
also called a job-cost sheet, records and accumulates all the costs assigned to a specific job, starting when the work begins
job-cost sheet
also called a job-cost record
job-costing system
the job cost is the unit or multiple of units of a distinct product or service called a job
labor-time sheet
contains info about the amount of labor time used for a specific job in a specific department
manufacturing overhead allocated
also called manufacturing overhead applied, the amount of manufacturing overhead costs allocated to individual jobs based on the budgeted rate multiplied by the actual quantity used of the allocation base
material-requisition record
contains info about the cost of DM used on a specific job and in a specific department
normal costing
a costing system that (1) traces direct costs to a cost object by using the actual direct-cost rates times the actual quantities of the direct-cost inputs and (2) allocates indirect costs based on the budgeted indirect-cost rates times the actual quantities of the cost-allocation bases
process-costing system
the cost object is masses of identical or similar units of a product or service
proration
spreads underallocated OH or overallocated OH among ending WIP, FG, and COGS inventory
source document
an original record that supports journal entries in an accounting system
overallocated indirect cost
also called overapplied and overabsorbed indirect costs, occur when the allocated amount of indirect costs in an accounting period is greater than the actual amount
underallocated indirect costs
also called underapplied and under absorbed indirect costs, occurs when the allocated amount of indirect costs in an accounting period is less than the actual (incurred) amount
