Chapter 2

Question 1

A costing method that includes all manufacturing costs- direct materials, direct labor, and both variable and fixed manufacturing overhead- in unit product costs

Answer 1

Absorption costing

Question 2

A measure of activity such as direct labor- hours or machine-hours that is used to assign cost to cost objects

Answer 2

Allocation base

Question 3

A document that shows the quantity of each type of direct material required to make a product

Answer 3

Bill of materials

Question 4

A factor, such a machine- hours, beds occupied, computer tiem, or flight hours, that causes overhead cost

Answer 4

Cost drivers

Question 5

A pricing method in which a predetermined markup is applied to a cost base to determine the target selling price

Answer 5

Cost-plus pricing

Question 6

A form that records the direc materials, direct labor, and manufacturing overhead cost charged to a job

Answer 6

Job cost sheet

Question 7

A costing system used in situations where many different products, jobs, or services are produced each period

Answer 7

Job order costing

Question 8

A document that specifies the type and quantity of materials to be drawn from the storeroom and that identifies the job that will be charged for the cost of those materials

Answer 8

Materials requisition form

Question 9

A costing system with multiple overhead cost pools and a different predetermined overhead rate for each cost pool, rather that a single predetermined overhead rate for the entire company. Each production department may be treated as a separate overhead cost pool

Answer 9

Multiple predetermined overhead rates

Question 10

A costing system in which overhead costs are applied to a job by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job

Answer 10

Normal cost system

Question 11

The process of assigning overhead cost to a specific job

Answer 11

Overhead application

Question 12

A single predetermined overhead rate that is used throughout a plant

Answer 12

Plantwide overhead rate

Question 13

A rate used to charge manufacturing overhead cost to jobs that is established in advance for each period. It is computed by dividing the estimated total manufacturing overhead cost for the period by the estimated total amount of the allocation base for the period

Answer 13

Predetermined overhead rate

Question 14

A document that is used to record the amount of time an employee spends on various activities

Answer 14

Time ticket