A costing method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.
A measure of activity such as direct labor-hours or machine-hours that is used to assign costs to cost objects.
A document that shows the quantity of each type of direct material required to make a product
Bills of materials
a factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes overhead costs
a form prepared for a job that records the materials, labor, and manufacturing overhead costs charges to that job.
Job cost sheet
a costing system used in situations where many different products, jobs, or services are produced each period.
A document that specifies the type and quantity of materials to be drawn from the storeroom and that identifies the job that will be charged for the cost of those materials.
materials requisition form
A costing system with multiple overhead cost pools and a different predetermined overhead rate for each cost pool, rather than a single predetermined overhead rate for the entire company. each production department may be treated as a separate overhead cost pool.
Multiple predetermined overhead rates
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.
Normal cost system
a credit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost applied to Work in Process exceeds the amount of overhead cost actually incurred during a period.
The process of charging manufacturing overhead cost to job cost sheets and to the Work in Process account.
A single predetermined overhead rate that is used throughout a plant.
plantwide 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.
Predetermined overhead rate
a costing system used in situations where a single, homogeneous product (such as cement or flour) is produced for long periods of time.
a document that is used to record the amount of time an employee spends on various activities.
A debit balance in the Manufacturing Overhead account that occurs when the amount of overhead cost actually incurred exceeds the amount of overhead cost applied to Work in Process during a period.