Chapter Three: Predetermined Overhead Rates, Flexible Budgets, And Absorption/ Variable Costing

Front 1

since overhead costs are indirect costs,

Back 1

they require some process of allocation

Front 2

cost allocation is the assignment of (blank) costs to one or more products using a reasonable basis

Back 2

indirect

Front 3

an actual cost system differs from a normal cost system in that an actual cost system

Back 3

assigns overhead at the end of the manufacturing process

Front 4

in a normal cost system, which of the following is used?

1. annual DM

2. annual DL

3. annual OVHD

Back 4

annual DM and annual DL

Front 5

redetermined overhead rates are computed based on

Back 5

estimated overhead costs and estimated level of activity

Front 6

a mixed cost has what components

Back 6

variable and fixed

Front 7

in the formula y= a + bX, y represents

Back 7

total costs

Front 8

in the formula y= a + bX, a represents

Back 8

fixed costs

Front 9

in relationship to changes in activity, variable overhead changes

Back 9

in total not per unit

Front 10

in relationship to changes in activity, fixed overhead changes

Back 10

per unit

Front 11

if the level of activity increases

Back 11

total cost will increase and fixed cost per unit will decrease

Front 12

if there is no "a" value in a linear cost equation, this is an indication that the cost is

Back 12

variable

Front 13

applied overhead consists of

Back 13

actual activity times predetermined overhead rate

Front 14

if a company used two overhead accounts (actual overhead and applied overhead), the one that would receive the most debits would be

Back 14

actual overhead

Front 15

if underapplied overhead is considered to be immaterial, it is closed to what account

Back 15

cost of goods sold

Front 16

overapplied overhead will result if

Back 16

overhead costs incurred were less than overhead costs charged to production