ACC-1B Lecture Notes - Lecture 2: Cost Accounting, Activity-Based Costing, Operations Management
Document Summary
Job order, process and activity based costing. Predetermined overhead rate - used to apply manufacturing overhead to jobs. Based on the relationship between estimated annual overhead costs and expected annual operating activity. Activity base such as: direct labor costs, direct labor. Hours, machine hours, any other measure that will provide an equitable basis for applying overhead costs to jobs. This is come up with at the beginning of the period. Formula for computing the predetermined overhead rate is: estimated annual. Overhead costs / expected annual operating activity = predetermined oh rate. Cost accounting - measures, records, and reports product costs. Underapplied overhead when actual manufacturing overhead costs are greater than the overhead applied to products. Cost accounting system - manufacturing cost accounts are fully integrated into the general ledger. Material requisition slip - source document which authorizes issuance of raw materials to production. Job order cost system - appropriate when products have distinguishing and heterogeneous characteristics.
