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Chapter 5 Terms
Chapter 5 Terms Managerial Accounting
| Term | Definition |
|---|---|
| actual cost system | only actual costs of direct materials, direct labor, and overhead are used to determine unit cost |
| adjusted cost of goods sold | cost of goods sold adjusted for the period's overhead variance |
| applied overhead | = predetermined overhead rate x actual activity level |
| causal factors | drivers that measure the consumption of services |
| common costs | costs of resources shared by two or more services or products |
| departmental overhead rate | = estimated department overhead divided by estimated departmental activity level |
| direct method | ignores support department interactions and assigns support department costs only to the producing departments |
| job | one distinct unit or set of units |
| job-order cost sheet | lists the total costs of materials, labor, and overhead for a single job |
| job-order costing system | costs are accumulated by job |
| materials requisition form | cost of direct materials is assigned to a job using this form. The form asks for the type, quantity, and unit price of the direct materials issued and the number of the job. |
| normal cost of goods sold | cost of goods sold before an adjustment for an overhead variance |
| normal cost system | determines unit cost by adding actual direct materials, actual direct labor, and estimated overhead |
| overapplied overhead | the amount of variance when actual overhead is less than applied overhead |
| overhead variance | the difference between actual overhead and applied overhead |
| plantwide overhead rate | single overhead rate calculated by using all estimated overhead for a factory divided by the estimated activity level across the entire factory |
| predetermined overhead rate | calculated at the beginning of the year by dividing the total estimated annual overhead by the total estimated level of associated activity or cost driver |
| process-costing system | the cost of one unit of a product is identical to the cost of another. Production costs are accumulated by process or department for a given period of time. Unit costs = process costs/output |
| producing departments | directly responsible for creating the products or services sold to customers |
| reciprocal method | this method of allocation recognizes all interactions among support departments. One support department's use by another figures in determining the total cost of each support department, and the total cost reflects these interactions. |
| sequential (or step) method | this method of allocation recognizes that interactions among support departments occur. Cost allocations are performed in a step-down fashion following a predetermined ranking procedure. |
| support departments | provide essential services for producing departments, but they do not actually make the product or service being sold |
| time ticket | the means by which direct labor costs are assigned to individual jobs |
| underapplied overhead | the amount of variance when actual overhead is greater than applied overhead |
Created by:
amberleemon
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