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ACCT 331 Chapter 4 Flashcards _ (DETAILED ANSWERS) 2024 - DISTINCTION GUARANTEED.pdf
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8/5/24, 8:36 AMACCT 331 Chapter 4
Jeremiah
Terms in this set (42)
How does a job-costing system differ from a A job-costing system assigns costs to distinct units; a process-costing system assigns
process-costing system? costs to masses of similar units.
Step 1
Identify the job that is the chosen cost object.
Step 2
Identify the direct costs of the job.
Step 3
Select the cost-allocation bases to use for allocating indirect costs to the job.
Step 4
Identify the indirect costs associated with each cost-allocation base.
Identify the seven steps in job costing.
Step 5
Compute the rate per unit of each cost-allocation base used to allocate indirect costs
to the job.
Step 6
Compute the indirect costs allocated to the job.
Step 7
Compute the total cost of the job by adding all direct and indirect costs assigned to the
job.
1. Identify Job
2. Identify direct costs
3. Select cost-allocation base
7 Steps 4. Identify Indirect Costs associated with base
5. Compute rate per unit of each allocation base
6. Compute indirect costs allocated
7. Compute TC = Adding all direct and indirect costs
Step 1 Identify the job that is the chosen cost object.
Step 2 Identify the direct costs of the job. = DIRECT MATERIAL, DIRECT LABOR
Step 3 Select the cost-allocation bases to use for allocating indirect costs to the job.
Select the cost-allocation bases to use for
allocating indirect costs to the job. = DIRECT LABOR HOURS, DIRECT LABOR COSTS, UNITS, ETC.
ACCT 331 Chapter 4
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Identify the indirect costs associated with each cost-allocation base.
Step 4 : Identify the indirect costs associated
with each cost-allocation base. ACTUAL = ACTUAL INDIRECT COSTS
NORMAL = BUDGETED INDIRECT COSTS
Compute overhead allocation rate to Actual Manufacturing Overhead Costs / Actual Total Quantity of Cost Allocation Base
allocate indirect costs
STEP 5 : Actual Manufacturing Overhead
Rate
STEP 5: Budgeted Manufacturing Overhead Budgeted Manufacturing Overhead Costs / Budgeted Total Quantity of Cost Allocation
Rate Base
Actual : Actual Allocation Rate x Actual Base Activity For the Job
STEP 6 : Compute Indirect Costs allocated to
the job Normal : BudgetedAllocation Rate x Actual Base Activity For the Job ---------------------
- ---------------------------------------------------------- >Results in over/under allocation of costs
STEP 7 : Compute total job costs (add all Add everything
direct and indirect costs)
Distinguish between actual costing and Actual costing and normal costing differ in their use of actual or budgeted indirect-cost
normal costing. rates.
Direct Costs (Actual) Actual Direct Cost Rates x Actual Quantities of direct cost inputs
Direct Costs (Normal) Actual Direct Cost Rates x Actual Quantities of direct cost inputs
Indirect Costs (Actual) Actual INDirect Cost Rates x Actual Quantities of cost allocation bases
Indirect Costs (Normal) !!! BUDGETED INDirect Cost Rates x Actual Quantities of cost allocation bases
Budgeted Manufacturing Overhead Rate Budgeted Manufacturing Overhead Costs / Budgeted Direct Manufacturing Labor
Actual Manufacturing Overhead Rate Actual Manufacturing Overhead Costs /Actual Direct Manufacturing Labor
Budgeted Indirect Cost Rate Budgeted Indirect Costs / Budgeted Direct Labor Hours
Actual Indirect Cost Rate Actual Indirect Costs / Actual Direct Labor Hours
Actual Manufacturing Overhead Costs
Actual Overhead Rate /
Actual Manufacturing Direct Labor
Budgeted Manufacturing Overhead Costs
Budgeted Overhead Rate /
Budgeted Manufacturing Direct Labor
Actual Overhead Costs Actual Direct Manufacturing Labor Costs X Actual Manufacturing Overhead Rate
Normal Overhead Costs Actual Direct Manufacturing Labor Costs X Budgeted Manufacturing Overhead Rate
Overhead Allocated using the normal Actual Direct Manufacturing Labor costs x Budgeted Manufacturing Overhead Rate
costing method
ACCT 331 Chapter 4
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