Accounting Final Exam Flashcards - Chapter 2: Job-Order Costing Pt. 1
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11 Terms
Job-order costing
A costing system that assigns product costs to specific jobs or units of product that are manufactured
Cost Driver
The measure used to assign the overhead costs in the cost pool to jobs.
Examples of common cost drivers
Direct-labor hours, direct labor cost, machine-hours, and units
Predetermined Overhead Rate Equation
Estimated total Manufacturing costs/Estimated Total Amount of the Cost Driver
MOH applied equation
POR * Actual amount of the cost driver used
Total Cost of a Job Equation
DM + DL + MOH Applied
Normal Costing
Using a POR to allocate manufacturing overhead costs to jobs
Job Cost Sheet
A form that records the DM, DL, and MOH charged to a job
Plantwide Rate
Organizations using a single cost pool and single POR to apply MOH costs to products
Departmental Rate
Organizations using two or more cost pools and multiple POR’s to apply MOH costs to products
Absorption costing
A costing method that includes all manufacturing costs (fixed and variable) in the cost of a product, required for financial reporting