Chapter 17 Job Order Costing

Question 1

Allocation Base

Answer 1

A denominator that links indirect costs to cost objects. Ideally, the allocation base is the primary cost driver of the indirect costs.

Question 2

Cost Driver

Answer 2

The primary factor that causes a cost to increase or decrease.

Question 3

Job

Answer 3

The production of a unique product or specialized service. May be one unit or a batch of units.

Question 4

Job Cost Record

Answer 4

Document that shows the direct materials, direct labor, and manufacturing overhead costs for an individual job.

Question 5

Job Order Costing Systems

Answer 5

An accounting system that accumulates costs by job. Used by companies that manufacture unique products or provide specialized services.

Question 6

Labor Time Record

Answer 6

A record used to assign direct labor cost to specific jobs.

Question 7

Materials Requisition

Answer 7

Request for the transfer of raw materials to the production floor.

Question 8

Overallocated Overhead

Answer 8

Occurs when the actual manufacturing overhead costs are less than allocated manufacturing overhead costs.

Question 9

Predetermined Overhead Allocation Rate

Answer 9

Estimated overhead cost per unit of the allocation base, calculated at the beginning of the accounting period.

= Total est. OH costs / Total est. quantity of the OH allocation base

Question 10

Process Costing System

Answer 10

An accounting system that accumulates cost by process. Used by companies that manufacture identical units through a series of uniform production steps or processes

Question 11

Underallocated Overhead

Answer 11

Occurs when the actual manufacturing Overhead costs are more than allocated manufacturing Overhead costs.