Chapter 3 – Job Costing – Flashcards
Unlock all answers in this set
Unlock answersquestion
flow of inventory through a manufacturing system
answer
raw materials, work in process, finished goods, cost of goods sold
question
Bill of Materials
answer
A list of all of the raw materials needed to manufacture a job
question
Billing Rate
answer
The labor rate charged to the customer, which includes both cost and profit components
question
Cost Driver
answer
The primary factor that causes a cost
question
Cost of Goods Sold account is debited and Finished Inventory is credited for
answer
The sale of goods to a customer
question
Extended Producer Responsibility
answer
Laws that require product manufacturers to "take back" a large percentage of the products they manufacture at the end of the product's life in order to reduce the amount of waste ending up in landfills and the environment
question
Job Cost Record
answer
A written or electronic document that lists the direct materials, direct labor, and manufacturing overhead costs assigned to each individual job
question
Job Costing
answer
A system for assigning costs to products or services that differ in the amount of materials, labor, and overhead required. Typically used by manufacturers that produce unique, or custom-ordered products in small batches; also used by professional service firms ex. hospitals, custom home builders
question
Invoice
answer
Bill from a supplier
question
Labor Time Record
answer
A written or electronic document that identifies the employee, the amount of time spent on a particular job, and the labor cost charged to a job
question
Management can use job cost information for each of the following except: -Determining cost of goods sold -Determining the profitability of different jobs -Bidding on custom jobs -All of the listed choices are possible uses of job cost information
answer
All of the listed choices are possible uses of job cost information
question
Materials Requisition
answer
A written or electronic document that requests specific materials be transferred from the raw materials inventory storeroom to the production floor
question
Overallocated Manufacturing Overhead
answer
Amount of manufacturing overhead allocated to jobs is more than the amount of manufacturing overhead costs actually incurred, results in jobs being over costed
question
Pick
answer
Storeroom workers remove items from raw materials inventory that are needed by production
question
Predetermined Manufacturing Overhead Rate
answer
The rate used to allocate manufacturing overhead to individual jobs; calculated before the year begins as follows: total estimated manufacturing overhead costs divided by total estimated amount of allocation base
question
Process Costing
answer
A system for assigning costs to a large number of identical units that typically pass through a series of uniform production steps. Total costs are averaged over all units ex. paint manufacturers, cereal manufacturers
question
Production Schedule
answer
A written or electronic document indicating the quantity and types of inventory that will be manufactured during a specified time frame
question
Purchase Order
answer
A written or electronic document authorizing the purchase of specific raw materials from a specific supplier
question
Raw Materials Record
answer
written or electronic document listening the number and cost of all units used and received, and the balance currently in stock; a separate received is maintained for each type of raw material kept in stock
question
Receiving Report
answer
A written or electronic document listing the quantity and type of raw materials received in an incoming shipment; the report is typically a duplicate of the purchase order without the quantity prelisted on the form
question
Stock Inventory
answer
Products normally kept on hand in order to quickly fill customer orders
question
Subsidiary Ledger
answer
Supporting detail for a general ledger account
question
Underallocated Manufacturing Overhead
answer
The amount of manufacturing overhead allocated to jobs is less than the amount of manufacturing overhead cost actually incurred this results in jobs being under costed
question
JOURNAL ENTRIES: Assume that Life Fitness ordered and received $90,000 of raw materials during December.
answer
Raw Materials Inventory 90,000 Accounts Payable 90,000
question
JOURNAL ENTRIES: Assume that Life Fitness used $112,000 of direct raw materials during December.
answer
Work in Process Inventory 112,000 Raw Materials Inventory 112,000
question
JOURNAL ENTRIES: Assume that Life Fitness used $90,000 of indirect raw materials during December.
answer
Manufacturing Overhead 2,000 Raw Materials Inventory 2,000
question
JOURNAL ENTRIES: Assume that Life Fitness incurred $30,000 of direct labor on jobs.
answer
Work in Process Inventory 30,000 Wages Payable 30,000
question
JOURNAL ENTRIES: Assume that Life Fitness incurred $13,000 of indirect labor on jobs.
answer
Manufacturing Overhead 13,000 Wages Payable 13,000
question
JOURNAL ENTRIES: Assume Life Fitness incurs other indirect manufacturing costs, such as plant utilities ($3,000), plant depreciation ($4,000), plant insurance ($1,000), and plant property taxes ($2,000), during the period.
answer
Manufacturing Overhead 10,000 Accounts Payable 3,000 Accumulated Depreciation 4,000 Prepaid Plant Insurance 1,000 Plant Property Taxes Payable 2,000
