Chapter 3- Job-Order Costing

Study online at quizlet.com/_86gx5

1. Absorption A costing method that includes all 14. Plantwide A single predetermined overhead rate that
Costing manufacturing costs- direct materials, direct Overhead is used throughout a plant.
labor, and both variable and fixed Rate
manufacturing overhead-in the cost of a
15. Predetermined A rate used to charge manufacturing
product.
Overhead overhead cost to jobs that is established in
2. Allocation A measure of activity such as direct labor- Rate advance for each period.
Base hours or machine-hours that is used to
16. Predetermined Estimated total manufacturing overhead
assign costs to cost objects.
Overhead cost at capacity/ estimated total amount of
3. Bill of A document that shows the quantity of each Rate Based on the allocation base at capacity.
Materials type of direct material required to make a Capacity
product. Equation
4. Cost Driver A factor, such as machine-hours, beds 17. Predetermined Estimated total manufacturing overhead
occupied, computer time, flight-hours, that Overhead cost for the period/ estimated total amount
causes overhead costs. Rate Equation of the allocation base for the period.
5. Cost of Goods The manufacturing costs associated with the 18. Raw Materials Any materials that go into the final product.
Manufactured goods that were finished during the period.
19. Schedule of A schedule that contains three elements of
6. Finished Units of product that have been completed Cost of Goods product costs- direct materials, direct labor,
Goods but not yet sold to customers. Manufactured and manufacturing overhead- and that
summarize the portions of those costs that
7. Job Cost Sheet A form that record the materials, labor, and
remain in ending Work in Process inventory
manufacturing overhead costs charged to a
and that are transferred out of Work in
job.
Process into Finished Goods.
8. Job-Order A costing system used in situation where
20. Time Ticket A document that is used to record the
Costing many different products, jobs, or services
amount of time an employee spends on
are produced each period.
various activities.
9. Materials A document that specifies the type and
21. Underapplied A debit balance in the Manufacturing
Requisition quantity of materials to be drawn from the
Overhead Overhead account that occurs when the
Form storeroom and that identifies the job that
amount of overhead cost actually incurred
will be charged for the cost of those
exceeds the amount of overhead cost
materials.
applied to Work in Process during a period.
10. Multiple A costing system with multiple overhead
22. Work in Units of product that are only partially
Predetermined cost pools and a different predetermined
Process complete and will require further work
Overhead overhead rate for each cost pool, rather
before they are ready for sale to the
Rates than a single predetermined overhead rate
customer.
for the entire company. (Each production
department may be treated as a separate
overhead cost pool.)
11. Normal Cost A costing system in which overhead costs
System are applied to a job by multiplying a
predetermined overhead rate by the actual
amount of the allocation base incurred by
the job.
12. Over-applied A credit balance in the Manufacturing
Overhead Overhead account that occurs when the
amount of the overhead cost applied to
Work in Process exceeds the amount of
overhead cost actually incurred during a
period.
13. Overhead The process of charging manufacturing
Application overhead cost to job cost sheets and to the
Work in Process account.