Cost Accounting - Ch. 4 2023 with complete solution questions and answers

cost pool a grouping of individual indirect cost items cost allocation base a systematic way to link an indirect cost or group of indirect costs to cost objects job costing system In this type of system the cost object is a unit of multiple units of distinct product or service. Each one uses different amounts of resources. The product or service is often a single unit, such as a specialized machine made at Hitachi, a construction project managed by Bechtel Corporation, a repair job done at an Audi Service Center, or an advertising campaign produced by Saatchi & Saatchi. Each machine is unique and distinct from others. process costing system In this type of system the cost object is masses of identical or similar units of a product or service. For example Citibank provides the same service to all its customers when processing customer deposits. All Minute Maid consumers receive the same frozen orange juice product 1.) identify chosen cost object 2.) Identify direct costs of job 3.) Select cost allocation base 4.) Identify the indirect costs 5.) Compute the rate per unit 6.) Compute indirect costs allocated 7.) Compute total cost of the job What is the Seven-Step Approach to job costing actual costing a costing system that uses actual costs to determine the cost of individual jobs actual costing a costing system that allocates indirect costs based on the actual indirect cost rate times the actual quantity of the cost allocation base normal costing a costing system that allocates indirect cost based on the budgeted indirect cost rate times the actual quantity of the cost allocation base source document an original record (such as a labor time card on which an employee's work hours are recorded) that supports journal entries in an accounting system job cost record used to record and accumulate all the costs assigned to a specific job starting when work begins materials requisition record source document that contains information about the cost of direct materials used on a specific job and in a specific department labor time sheet source document for direct manufacturing labor