Managerial Accounting Chapter 4

Front 1

Absorption Costing

Back 1

A costing method that includes all manufacturing costs-direct materials, direct labor, and both variable and fixed manufacturing overhead-in unit product costs.

Front 2

Allocation Base

Back 2

A measure of activity such as direct labor hours or machine hours that is used to assign costs to cost objects.

Front 3

Bill of Materials

Back 3

A document that shows the quantity of each type of direct material required to make a product.

Front 4

Cost Driver

Back 4

A facor, such as machine hours, beds occupied, computer time, or flight hours, that causes overhead costs.

Front 5

Cost of Goods Manufactured

Back 5

The manufacturing costs associated with the goods that were finished during the period.

Front 6

Finished Goods

Back 6

Units of product that have been completed but not yet sold to customers.

Front 7

Job Cost Sheet

Back 7

A form that records the materials, labor, and manufacturing overhead costs charged to a job.

Front 8

Job-Order Costing

Back 8

A costing system used in situations where many different products, jobs, or services are produced each period.

Front 9

Materials Requisition Form

Back 9

A document that specifies the type and quantity of materials to be drawn from the storeroom and that identifies the job that will be charged for the cost of those materials.

Front 10

Multiple Predetermined Overhead Rates

Back 10

A costing system with multiple overhead cost pools and a different predetermined overhead rate for each cost pool, rather that a single predetermined overhead rate for the entire company. Each production department may be treated as a separate overhead cost pool.

Front 11

Normal Cost System

Back 11

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.

Front 12

Overapplied Overhead

Back 12

A credit balance in the manufacturing overhead account that occurs when the amount of overhead cost applied to work in process eceeds the amount of overhead cost actually incurred during a period.

Front 13

Overhead Application

Back 13

The process of charging manufacturing overhead cost to job cost sheets and to the work in process account.

Front 14

Plantwide Overhead Rate

Back 14

A single predetermined overhead rate that is used throughout a plant.

Front 15

Predetermined Overhead Rate

Back 15

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.

Front 16

Raw Materials

Back 16

Any materials that go into the final product.

Front 17

Time Ticket

Back 17

A document that is used to record the amount of time an employee spends on various activities.

Front 18

Underapplied Overhead

Back 18

A debit balance in the manufacturing overhead account that occurs when the amount of overhead cost actually incurred exceeds the amount of overhead cost applied to work in process during a period.

Front 19

Work in Process

Back 19

Units of product that are only partially complete and will require further work before they are ready for sale to the customer.