Costing System that traces direct costs to a cost object by using the actual direct-cost rates times the actual quantites of the direct-costs inputs.
Actual indirect-cost rate
Actual total indirect costs /by the actual total quantity of the cost-allocation base .
Adjusted allocation-rate approach
All overhead entries in the general ledger and subsidiary ledgers using actual cost rates rather than budgeted cost rates.
Budgeted indirect cost rate
Budgeted annual indirect costs/Budgeted annual quantity of the cost-allocation base
A systematic way to link an indirect cost or group of indirect costs to cost objects.
The cost-allocation base is when the cost object is a job, product, or customer.
Source document that records and accumulates all the costs assigned to a specific job, starting when work begins. Also called Job-cost sheets
Costing system in which the cost object is a unit or multiple units of a distinct product or service called a job.
Source document that contains information about the amount of labor time used for a specific job in a specific department.
Manufacturing overhead allocated
Amount of manufacturing overhead costs allocated to individual jobs, products, or services based on the budgeted rate x by the actual quantity used of the cost-allocation base. Also called manufacturing overhead applied.
Source document that contains information about the cost of direct materials used on a specific job and in a specific department.
A costing system that traces direct costs to a cost object by using the actual direct-cost rates x the actual quantities of the direct-cost inputs and that allocates indirect costs based on the budgeted indirect-cost rates x the actual quantities of the cost-allocation bases.
Overallocated indirect costs
Allocated amount of indirect costs in an accounting period is greater than the actual (incurred) amount in that period. Also called overapplied and overabsorbed indirect costs.
Costing system in which the cost object is masses of identitcal or similar units of a product or service.
The spreading of underallocated manufacturing overhead or overallocated manufacturing overhead among ending work in process, finished goods, and cost of goods sold.