Manufacturing Overhead(Flashcards)

This annual cost rate is estimated prior to the start of an accounting year and then used during the accounting year to attach indirect manufacturing costs to products.

This product costing method uses the actual cost of direct materials and direct labor, but uses an allocated amount of manufacturing overhead.

This is the acceptable production output to which manufacturing costs are assigned.

This is the result of assigning more indirect manufacturing costs than the actual or the planned amount.

This is the result of assigning less indirect manufacturing costs than the actual or the planned amount.

This term refers to the amounts which are predetermined, planned or expected.

This difference occurs when the actual product costs are less than the budgeted, planned, or standard costs for a manufacturer’s good output.

This difference occurs when the actual product costs are more than the budgeted, planned, or standard costs for a manufacturer’s good output.

These are a manufacturer’s predetermined costs for direct materials, direct labor, and manufacturing overhead. When actual costs differ from these, variances are reported.

This assigning of manufacturing overhead costs to products is likely based on machine hours or direct labor. If these costs are not caused by machine hours or direct labor, the allocations are not precise.

This costing method allocates all manufacturing overhead costs (including fixed) to products manufactured. This method is required for external financial statements and income tax returns of U.S. companies.

Under this costing method the fixed manufacturing costs are immediately expensed as period costs instead of allocating them to the goods produced. (This is not acceptable for external reporting by U.S. companies.)

These indirect manufacturing costs do not change in total within a relevant range of activity.

These indirect manufacturing costs change in total in proportion with the change in volume or activity.

These indirect manufacturing costs are partly fixed and partly variable.

These factory cost centers do not directly produce goods. Example: factory maintenance department.

This costing method attempts to allocate a company’s costs and expenses to products based on their root causes. (Instead of merely spreading the costs based on machine hours or direct labor).

This is the ideal basis for assigning indirect manufacturing costs to products. However, it is not likely to occur using traditional costing.

This is the additional $5 per hour that a person earning $10 per hour will receive when working more than 40 hours in a week. It is also known as the “half” in “time and a half.”

This budget will increase or decrease according to the level of activity. Example: the budget for variable manufacturing overhead costs will increase when the good output is increased.

This budget remains constant regardless of the volume of activity or the volume of good output.