lesson 4 accounting for factory overhead

Question 1

aggregate of indirect materials, indirect wages, and indirect expenses

Answer 1

overheads

Question 2

identified with a given cost object and can be accurately traced to cost objects

Answer 2

direct costs

Question 3

cannot be directly traced to a cost object and assigned to cost objects using cost allocations

Answer 3

indirect costs

Question 4

process of grouping costs according to their common characteristics and establishment of a series of special groups according to cost class

Answer 4

cost classification

Question 5

these sheets may be used to keep a subsidiary record of factory overhead expenses

Answer 5

factory overhead analysis sheets

Question 6

factory overhead analysis sheets types

Answer 6

expense-type analysis spreadsheet
department-type analysis spreadshee

Question 7

when factory overhead expenses are not identified with a specific department, they are charged to departments by a process of allocation

Answer 7

general factory overhead expenses

Question 8

stages in overheads accounting

Answer 8

administrative
computing
codification
allocation
apportionment

Question 9

includes collection of overheads, classification and codification of OH

Answer 9

administrative

Question 10

technique of intelligent description of numerous cost accounting heads for recording and controlling. helps to group items of overheads of similar nature

Answer 10

codification

Question 11

process of identification of overheads with a specific production or service department

Answer 11

allocation

Question 12

allotment of proportions of items to departments or units

Answer 12

apportionment

Question 13

essential part of the organization, but they do not work directly on the product

Answer 13

service departments

Question 14

perform the actual manufacturing operations that physically change the units being processed

Answer 14

production departments

Question 15

where cost can be clearly identified with a cost center or a cost unit, then it cacn be allocated to that cost center or cost unit

Answer 15

cost allocation

Question 16

how the overhead costs are distributed

Answer 16

1. direct/specific allocation
2. primary allocation (apportionment)
3. secondary allocation (re-apportionment)

Question 17

allotment of total item cost to a particular department

Answer 17

direct allocation

Question 18

refers to spreading the overhead costs to all production and services department on the common basis of distributing

Answer 18

primary allocation

Question 19

refers to apportioning of all service department costs to production department

Answer 19

secondary allocation

Question 20

costs of service department are directly apportioned to production department only

Answer 20

direct distribution method

Question 21

distributes service department costs regressively to other service departments and then to production departments

Answer 21

sequential distribution or step-down method

Question 22

distributes costs by simultaneous equations recognizing the relationship of services rendered by departments to each other

Answer 22

algebraic distribution method

Question 23

the service department costs are repeatedly allocated among the production and service department in the specified percentages until the figures become too small to be significant

Answer 23

repeated distribution method

Question 24

overhead absorption rates formula

Answer 24

total overhead expenses / quantity or value of basis

Question 25

main overhead rates

Answer 25

predetermined overhead rate blanket oh rate multiple oh rate

Question 26

the overhead absorption rate is calculated prior to the accounting period, using estimated or budgeted figures for overheads and units of the absorption base chosen

Answer 26

predetermined overheads

Question 27

best serves highly automated departments where the amount of factory overhead cost incurred on a job is primarily a function of the machine time that a job requires.

Answer 27

machine hour method