Terminology
ABC Rate
What is the Rate
More ABCs
Under or Over
100
Accumulates costs for different jobs based on the product/service
What is job costing
100
Assembly $400,000 40,000 hours Setup $280,000 8,000 setups Design $160,000 80,000 hours What is the rate for design?
What is $2.00
100
Budgeted overhead $3,300,000 Direct Labor Hours 60,000 Machine Hours 150,000 Allocated based on DLH
What is $55.00
100
Assembly $392,000 80,000 hours 800 hours Job 7 Setup $30,000 5,000 setups 20 setups Job 7 Design $180,000 7,500 hours 200 hours Job 7 What is the rate for assembly?
What is $4.90
100
MOH Control $478,000 MOH Applied $473,000
What is under
200
Allocates costs in an equal amount to all products produced in mass
What is process costing
200
Assembly $400,000 40,000 hours Setup $280,000 8,000 setups Design $160,000 80,000 hours What is the rate for setup?
What is $35
200
Budgeted overhead $5,400,000 Direct Labor Hours 30,000 Machine Hours 150,000 Allocated based on DLH
What is $180.00
200
Assembly $392,000 80,000 hours 800 hours Job 7 Setup $30,000 5,000 setups 20 setups Job 7 Design $180,000 12,500 hours 200 hours Job 7 What is the rate for design?
What is $14.40
200
Budgeted Rate $12.50 per DLH Budget DLH's 22,175 Actual DLH's 22,893
What is under
300
Average costing is also called
What is peanut-butter costing
300
Assembly $400,000 40,000 hours 500 hours Job 7 Setup $280,000 8,000 setups 20 setups Job 7 Design $160,000 80,000 hours 800 hours Job 7 What is the total design allocation for Job 7?
What is $1,600
300
Budgeted overhead $600,000 Direct Labor Hours 6 hours per product Machine Hours 3 hours per product 2,000 products Allocated based on MH
What is $100
300
Assembly $392,000 80,000 hours 800 hours Job 7 Setup $30,000 5,000 setups 20 setups Job 7 Design $180,000 12,500 hours 200 hours Job 7 What is the total allocation for setups to Job 7?
What is $120
300
Budgeted Rate $12.50 per MH Budget DLH's 57,175 Actual DLH's 63,250 Budget MH 27,980 Actual MH 27, 875
What is over
400
Seeks to distinguish batch-level, product-sustaining and facility sustaining costs
What is ABC costing
400
Assembly $400,000 40,000 hours 750 hours Job 6 Setup $280,000 8,000 setups 25 setups Job 6 Design $160,000 80,000 hours 925 hours Job 6 What is the total OH allocation for Job 7?
What is $10,225
400
Budgeted overhead $1,500,000 Direct Labor Hours 4 hours per product Machine Hours 2.5 hours per product 62,500 products Allocated based on DLH
What is $6.00
400
Assembly $392,000 80,000 hours 800 hours Job 7 Setup $30,000 5,000 setups 20 setups Job 7 Design $180,000 12,500 hours 200 hours Job 7 What are the total overhead costs allocated to Job 7?
What is $6,920
400
Product cross-subsidization
What is when one product is under costed because another is over costed
500
Assumes that all support activities affect all products in a uniform way
What is single indirect-cost rate
500
Assembly $400,000 40,000 hours 500 hours Job 7 Setup $280,000 8,000 setups 20 setups Job 7 Design $160,000 80,000 hours 800 hours Job 7 What is the total OH allocation for Job 7?
What is $7,300
500
Budgeted overhead $600,000 Direct Labor Hours 6 hours per product Machine Hours 3 hours per product 2,000 products Allocated based on DLH
What is $50
500
Assembly $392,000 80,000 hours 1150 hours Job 8 Setup $30,000 5,000 setups 45 setups Job 8 Design $180,000 12,500 hours 380 hours Job 8 What are the total overhead costs allocated to Job 8?
What is $11,377
500
Three ways to dispose of under- or over-allocated overhead costs
What are write-off, prorated, and adjusted
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