ACIS 2115 Chapter Notes - Chapter 1: Income Statement, Finished Good, Cost Driver

• School: Virginia Tech
• Department: Accounting and Information Systems
• Course: ACIS 2115
• Professor: Sharpe

Document Summary

Chapter 2: job-order costing: absorption costing- all manufacturing costs, both fixed and variable, are assigned to units of product- units are said to fully absorb manufacturing costs. Indirect labor: time ticket- an hour by hour summary of the employee"s activities throughout the day computing predetermined overhead rates, 1. Manufacturing overhead is an indirect cost: 2. Consists of many different types of costs: 3. If an actual rate is computed, seasonal factors in oh or the allocation base can produce fluctuations in the oh rate: ex. Heating and cooling costs: choice of an allocation base for overhead cost, cost driver- a factor, such as machine hours, beds occupied, computer time, or flight- hours that causes oh costs. Job-ordering costing in service companies: whe(cid:374) (cid:272)o(cid:373)pa(cid:374)ies use thi(cid:374)gs su(cid:272)h as (cid:862)ea(cid:272)h (cid:373)ovie(cid:863) to (cid:272)ou(cid:374)t as o(cid:374)e (cid:862)jo(cid:271)(cid:863) In summary: compute a predetermined overhead rate, rate determined at the beginning, determined by dividing estimating total manufacturing oh cost by the estimated.