[ACYCST1] Job Order Costing

Process Costing

a company produces many units of a single product

Job-order Costing

many different products are produced each period and are manufactured to order.

Predetermined overhead rate

used to apply overhead to jobs is determined before the period begins

Estimated cost / Estimated units

Predetermined overhead rate

Cost driver

a metric, such as the amount or volume of something or the level of an activity, that causally affects the level of a cost over a given time span.

POHR x Actual activity

Manufacturing overhead applied

Unit cost

calculated by dividing the total cost by the related number of units produced

Finished goods

transferred from the production departments to the finished goods warehouse when a job has been completed

Normal costing

a 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