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Terminology
Job Costing
ABC
More Terms
Under or Over
100

The practice of allocating manufacturing overhead cost by using one overhead rate

What is broad averaging or peanut-butter costing or plantwide rate

100
The main source document for a job
What is job-cost record
100
Businesses should only implement ABC costing if
What is the benefits exceed the implementation costs
100
Costs that can be traced to a cost object in a cost-effective manner
What are direct costs
100
When you put all of the under- or over-allocated overhead into Cost of Goods Sold
What is the write-off approach
200
When a company undercosts one of its products and overcosts another
What is cross subsidization
200
Anything for which a measurement of costs is desired
What is cost object
200
An event, task or unit of work with a specifies purpose such as product design
What is activity
200
Budgeted annual manufacturing overhead costs divided by the budgeted annual activity
What is the budgeted overhead cost rate
200
MOH Control has a balance of $1,000,000 MOH Applied has a balance of $989,000
What is underallocated
300
Assigns costs to products based on its usage of resources
What is what is activity based costing
300
In a job costing system the cost object is called
What is a job
300
The base used to determine cost for each activity pool
What is cost driver
300
Establishes a cause-and-effect relationship with the activities performs
What is ABC costing
300
MOH Control has a balance of $575,000 MOH Applied has a balance of $589,000
What is overallocated
400
The costing system used when a company produces unique items
What is job costing
400
For which of the following industries would job costing not be appropriate? Home construction Aircraft assembly Cereal production
What is cereal production
400
Implementation of ABC costing allows managers to remove costs that are
What is non-value added
400
A grouping of individual indirect cost items
What is a cost pool
400
Restating all overhead entries using actual cost rates instead of budgeted cost rates
What is the adjusted allocation approach
500
A costing system that traces costs to a cost object by using the budgeted cost rates times the actual quantities
What is normal costing
500
What order should these be in? Identify indirect costs Compute the total cost of the job Select cost-allocation bases Compute the indirect cost rate
What is select cost-allocation bases, identify indirect costs, compute the indirect cost rate and compute the total cost of the job
500
Converting from simple costing to ABC costing is called
What is refining a costing system
500
The process of assigning indirect costs
What is cost allocation
500
The spreading of under- or over-allocated overhead among work-in-process, finished goods and cost of goods sold
What is the proration approach