CH 3 Flashcards

Supply chain management terms
Terms Definitions
absorption costing
a costing method that includes all manufacturing cots-direct materials, direct labor, and both variable and fixed manufacturing overhead-in the cost of a product
allocation base
a measure of activity such as direct labor-hours or machine-hours that is used to assign cots to cost objects
bill of materials
a document that show the quantity of each type of direct material required to make a product
cost driver
a factor, such as machine hours, beds occupied, computer time, or flight hours that causes overhead costs
cost of goods manufactured
the manufacturing costs associated with the goods that were finished during the period
finished goods
units of product that have been completed but not yet sold to customers
job cost sheet
a form that records the materials, labor, and manufacturing overhead costs charged to a job
job-order costing
a costing system used in situations where many different products, jobs, or services are produced each period
materials requisition form
a document that specifies the type and quantity of materials to be drawn from the storeroom and that identifies the job that will be charged for the cost of those materials
multiple predetermined overhead rates
a costing system with multiple overhead cost pools and a different predetermined overhead rate for each cost pool, rather than a single predetermined overhead rate for the entire company. each production department may be treated as a separate overhead cost pool
normal cost system
a costing system in which overhead costs are applied to a job by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job
overapplied overhead
a credit balance in the manufacturing overhead account that occurs when the amount of overhead cost applied to work in process exceeds the amount of overhead cost actually incurred during a period
overhead application
the process of charging manufacturing overhead cost to job cost sheets and to the work in process account
plantwide overhead rate
a single predetermined overhead rate that is used throughout a plant
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