Question: tf and explain why please 1 a cost driver is...
T/F and Explain why Please
1) A cost driver is a factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes direct costs.
2) Job-order costing systems often use allocation bases that do not reflect how jobs actually use overhead resources.
3) An employee time ticket is an hour-by-hour summary of the employee's activities throughout the day.
4) The formula for computing the predetermined overhead rate is:
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base
5) Generally speaking, when going through the process of computing a predetermined overhead rate, the estimated total manufacturing overhead cost is determined before estimating the amount of the allocation base.
6) If a job is not completed at year end, then no manufacturing overhead cost would be applied to that job when a predetermined overhead rate is used.
7) Actual overhead costs are not assigned to jobs in a job costing system.