Ch456SummaryPoints - Chapters 4 5 6 and Part of 7...

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Unformatted text preview: Chapters 4, 5, 6, and Part of 7 Highlights Review of Where We Have Been Over the Past 4 Chapters: I. Chapter 4: A. Saw direct costs attached directly to products B. Saw the need for a surrogate (cost driver, linkage) way of attaching overhead (indirect costs) to products – a predetermined overhead rate C. Developed a “predetermined” overhead rate D. Do the BEFORE, DURING, AFTER stuff. BEFORE: 1. Need expected volume or activity for the period 2. Need a cost driver (that surrogate link) 3. Need estimates of overhead costs for the period (preferably fixed & variable) 4. Set the overhead rate E. DURING: 1. Spend on overhead expenses – actual overhead 2. “BOP” overhead onto products – applied overhead F. AFTER: 1. Determine whether we over or underapplied overhead 2. Analyze over or underapplied overhead as to causes G. Calculate unit costs based on materials, labor, and overhead added to work-in-process H. Understand the O/H “T-account” – Actual & Applied sides and over & under applied overhead...
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This note was uploaded on 03/30/2008 for the course ACCT 202 taught by Professor Sollenberger during the Spring '08 term at Michigan State University.

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Ch456SummaryPoints - Chapters 4 5 6 and Part of 7...

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