BUS 371 Ch 3 Key Terms

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Flashcards on BUS 371 Ch 3 Key Terms
Jamie Plym
Flashcards by Jamie Plym, updated more than 1 year ago
Jamie Plym
Created by Jamie Plym over 1 year ago
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Absorption costing A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in unit product costs.
Allocation base A measure of activity such as direct labor-hours or machine-hours that is used to assign costs to cost objects.
Cost of goods manufactured The manufacturing costs associated with units of product that were finished during the period.
Finished goods Units of product that have been completed but not yet sold to customers.
Job cost sheet A form that records the direct materials, direct labor, and manufacturing overhead cost charged to a job.
Job-order costing A costing system used in situations where many different products, jobs, or services are produced each period.
Normal cost system 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.
Overapplied overhead A credit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost applied to Work in Process is greater than the amount of overhead cost actually incurred during a period.
Overhead application The process of assigning overhead cost to specific jobs.
Predetermined overhead rate 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.
Raw materials Any materials that go into the final product.
Schedule of cost of goods manufactured A schedule that contains three elements of product costs—direct materials, direct labor, and manufacturing overhead—and that summarizes the portions of those costs that remain in ending Work in Process inventory and that are transferred out of Work in Process into Finished Goods.
Schedule of cost of goods sold A schedule that contains three elements of product costs—direct materials, direct labor, and manufacturing overhead—and that summarizes the portions of those costs that remain in ending Finished Goods inventory and that are transferred out of Finished Goods into Cost of Goods Sold.
Underapplied overhead A debit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost applied to Work in Process is less than the amount of overhead cost actually incurred during a period.
Work in process Units of product that are only partially complete and will require further work before they are ready for sale to the customer.
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