Accounting Chapter 3

  1. Abrosbtion Costing
    all manufacturing costs, fixed and variable, assigned to units of product
  2. Process Costing
    used in companies that produce many units of a single product for long periods
  3. Unit Product Cost Equation
    Unit product cost = total manufacturing cost / total units produced
  4. Job order costing
    used in situations where many different products are produced each period.
  5. Bill of Materials
    is a document that lists the type and quantity of each type of direct material needed to complete a unit of product.
  6. Materials requisition form
    Specifies the type and quantity of materials to be drawn from the storeroom and identifies the job that will be charged for the cost of materials.
  7. Job cost sheet
    a form prepared for a job that records the materials, labor, and manufacturing overhead costs charged to that job
  8. Allocation Base
    is a measure such as direct labor hours, or machine hours that is used to assign overhead costs to products and services
  9. Predetermined overhead rate equation
    POH = Estimated total manufacturing overhead cost / estimated total amount of the allocation base POH = OH$ / DLH
  10. Overhead application equation
    Overhead applied to a particular job = predetermined OH rate X amount of the allocation base incurred by the job

    Applied overhead = POH * Actual DLH
Card Set
Accounting Chapter 3
Terms and Equations for Chapter 3