Job Cost System Flashcards
What is managerial accounting?
Managerial accounting involves the process of preparing management reports and accounts that provide accurate and timely financial and statistical information to managers for decision-making.
What is a job cost system?
A job cost system is an accounting system that assigns costs to specific jobs or batches of products, allowing for detailed tracking of expenses and profitability.
True or False: A job cost system is primarily used for service industries.
False: A job cost system is commonly used in manufacturing and construction industries where products are made to order.
Fill in the blank: In a job cost system, costs are accumulated for each __________.
job
What are the three main types of costs tracked in a job cost system?
Direct materials, direct labor, and manufacturing overhead.
Multiple Choice: Which of the following is NOT a component of job costing? A) Direct materials B) Direct labor C) Fixed assets D) Manufacturing overhead
C) Fixed assets
What is the purpose of a job cost sheet?
A job cost sheet records all costs associated with a specific job, providing a detailed breakdown for analysis and reporting.
True or False: Overhead costs are typically applied to jobs using a predetermined overhead rate.
True
What is a predetermined overhead rate?
A predetermined overhead rate is an estimated rate used to allocate manufacturing overhead costs to individual jobs based on a specific activity level.
Fill in the blank: The total cost of a job includes direct materials, direct labor, and __________.
allocated overhead
Short Answer: How do you calculate the total cost of a job?
Total cost of a job is calculated by summing direct materials, direct labor, and applied overhead costs.
Multiple Choice: What is the formula for calculating the predetermined overhead rate? A) Total estimated overhead / Total estimated direct labor hours B) Total actual overhead / Total actual direct labor hours C) Total estimated overhead / Total estimated machine hours
A) Total estimated overhead / Total estimated direct labor hours
True or False: Job cost systems provide detailed information that is useful for pricing decisions.
True
What is the significance of variance analysis in a job cost system?
Variance analysis helps identify differences between estimated and actual costs, aiding in cost control and operational efficiency.
Fill in the blank: Job cost systems are primarily used for __________ production.
custom
