Chapter 3 Flashcards
(14 cards)
A costing method that includes all manufacturing costs- direct material, direct labor, and both variable and fixed manufacturing overhead- in unit product costs.
Absorption costing
A measure of activity such as direct labor-hours or machine- hours that is used to assign costs to cost objects.
Allocation base
The manufacturing costs associated with units of product that were finished during the period.
Cost of goods manufactured
Units of product that have been completed but not yet sold to customers.
Finished goods
A form that records the direct materials, direct labor, and manufacturing overhead cost charged to a job.
Job cost sheet
A costing system used in situations where many different products, jobs, or services are produced each period.
Job- order costing
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.
Normal costing
A credit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost applied to Work in Process is greater that the amount of overhead cost actually incurred during the period.
Overapplied overhead
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.
Predetermined overhead rate
Any materials that go into the final product.
Raw materials
A schedule that contains three elements of product costs- direct materials, direct labor, and manufacturing overhead– and that summarizes the portions of those costs that remain in ending Work in Process inventory and that are transferred out of Work in Process into Finished Goods.
Schedule of cost of goods manufactured
A schedule that contains three elements of product costs- direct materials, direct labor, and manufacturing overhead– and that summarizes the portions of those costs that remain in ending Finish Goods inventory and that are transferred out of Finished Goods into Cost of Goods Sold.
Schedule of cost of goods sold
A debit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost applied to Work in Process is less that the amount of overhead cost actually incurred during a period
Underapplied overhead
Units of product that are only partially complete and will require further work before they are ready for sale to the customer.
Work in process
