16SU Q2 Study Guide on Chapters 17-19.pdf

16SU Q2 Study Guide on Chapters 17-19.pdf - 16SU 2071 Quiz...

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16SU 2071 Quiz 2 on Chapters 17-19 Study Guide with Sample Questions Chapter 17 discusses job order costing, a special accounting system used for product costing by companies that manufacture unique products as individual units or in distinct batches. Job order costing also applies to companies that provide specialized services . The job order costing system is described, including details concerning the job cost record, which accumulates costs of direct materials, direct labor, and manufacturing overhead associated with a specific job. Procedures are explained for tracing direct materials and direct labor costs to specific jobs, based on information provided in related materials requisitions and labor time records. Next, an overview of how overhead costs flow through the job order costing system is provided, including the calculation and use of a predetermined overhead allocation rate. The disposition of underallocated or overallocated manufacturing overhead is examined. The chapter discussion ends with an overview of job order costing in a manufacturing company as contrasted with job costing in a service company. Direct materials and direct labor can be easily traced to products, so they are assigned . Manufacturing overhead, an indirect cost, cannot be easily traced and is allocated . Distinguish between job-order and process costing systems and between traditional, simple costing systems and ABC Businesses need to know the costs of their products or services. Job order costing is used by companies that manufacture unique products or provide specialized services. Process costing is used by companies that produce identical units through a series of uniform processes. True or False 1) Companies that over-cost products will most likely lose market share. 2) If companies increase market share in a given product line because their reported costs are less than their actual costs, they will become more profitable in the long run.
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