Textbook Notes (369,133)
Canada (162,403)
Management (865)
MGT223H5 (26)
Minlei Ye (13)
Chapter 03

MGT223 Chapter03:Job-Order Costing Notes

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Department
Management
Course Code
MGT223H5
Professor
Minlei Ye

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Description
MGT223 Chapter03: Job-Order Costing Notes Job-Order Costing: charge direct material and direct labour costs to each job as work is performed, manufactured overhead are allocated to all jobs rather than directly traced to each job Predetermined Overhead Rate(POHR): used to apply overhead to jobs is determined before the period Estimated total manufacturing overhead cost for the coming period POHR = Estimated total units in the allocation base for the coming period (cost driver that causes overhead) Cost driver for DM is number of units made, for MOH is machine hours, labour hours Overhead applied = POHR x Actual Activity , estimated before the period, the actual amount of the allocation is based upon the actual level of activity Why not use actual MOH? - It is impossible to trace overhead costs to particular jobs - Managers need timely information
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