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9 Cards in this Set
- Front
- Back
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How do you calculate the job cost record and the average cost per unit?
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Direct materials + Direct labor + Allocated MOH = Total job cost / Number of units = Average cost per unit
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If you know that you want your sale price to be 150% of manufacturing costs, how do you begin to determine it?
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Use cost-plus pricing:
Estimated sales price = Average manufacturing cost per unit + Markup* Markup = Average cost per unit x Percentage (1.5 in this case) |
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What is the flow of costs for job costing?
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Raw materials: WIP inventory: Finished goods inventory: COGS
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What is the predetermined manufacturing overhead rate and how do you calculate it?
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It is used to estimate how MOH will be allocated throughout the year.
pMOH rate = Total estimated MOH costs / Total estimated quantity of the MOH allocation base |
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How do you allocate MOH to individual jobs?
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MOH allocated to a job = Predetermined MOH rate x Actual quantity of the allocation base used by the job
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Where is manufacturing overhead closed out to in a journal entry if it is over or underallocated?
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COGS
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Where does allocated MOH go after it is calculated?
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Work in process inventory
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If COGS is undercosted or overcosted by allocated MOH, what journal entries do you use to fix it?
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Overcosted:
Debit MOH Credit COGS Undercosted: Debit COGS Credit MOH |
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What are the steps of job costing in a service company?
(Assume direct labor is the allocation base) |
1. Determine how much direct labor is used on the job.
2. Total the indirect costs. 3. Identify cost allocation base. 4. Estimate total quantity of allocation base. 5. Compute the predetermined indirect cost allocation base (expected indirect costs / expected direct labor costs) 6. Obtain actual quantity of cost allocation base. 7. Allocate indirect costs to job (predetermined indirect cost allocation rate x actual quantity of allocation base by the job) 8. Add the direct costs and allocated indirect costs. 9. Determine price of job by using a markup. |
