CHAPTER 15 JOB ORDER COSTING Predetermined Overhead Rate
Spiegel, Matt, Host has reference to this Academic Journal, PHwiki organized this Journal CHAPTER 15 JOB ORDER COSTING Accounting, Fourth Edition Chapter Preview
This Particular University is Related to this Particular Journal
Explain the characteristics in addition to purposes of cost accounting. Describe the flow of costs in a job order costing system. Explain the nature in addition to importance of a job cost sheet. Indicate how the predetermined overhead rate is determined in addition to used. Study Objectives Study Objectives Prepare entries as long as jobs completed in addition to sold. Distinguish between under- in addition to over- applied manufacturing overhead. Job Order Costing Job order cost system Process cost system Accumulating manufacturing costs Assigning manufacturing costs to work in process Assigning costs to finished goods Assigning costs to cost of goods sold Job order costing as long as service companies Summary of job order cost flows Advantages/disadvantages of job order costing Cost of goods manufactured schedule Income statement presentation Under- or overapplied manufacturing overhead
Preview of Chapter Accurate product costing is critical to a companys success: For accurate bids on new jobs. For identifying profitability of completed jobs. For determining potential profitability of new jobs. Cost Accounting Systems Cost accounting involves the: Measuring, Recording, in addition to Reporting of product costs. From accumulated data, companies determine both the total cost in addition to the unit cost of each product. The accuracy of the product cost in as long as mation is critical to company success. Product cost in as long as mation helps determine which product to produce, the amount to produce, in addition to what price to charge. Vital as long as effective evaluation of employee per as long as mance. SO 1: Explain the characteristics in addition to purposes of cost accounting. Cost Accounting Systems Consists of accounts as long as the various manufacturing costs. Such accounts are fully integrated into the general ledger system. An important feature is the use of a perpetual inventory system to provide immediate, up-to-date in as long as mation on the cost of a product. SO 1: Explain the characteristics in addition to purposes of cost accounting.
Cost Accounting Systems There are two basic types of cost accounting systems: SO 1: Explain the characteristics in addition to purposes of cost accounting. Job Order Cost System Costs are assigned to each job or batch of goods. Job: Making a movie by Disney Batch: 225 wedding invitations as long as Mary A job may be as long as a specific order or as long as inventory. A key feature: Each job or batch has its own distinguishing characteristics . SO 1: Explain the characteristics in addition to purposes of cost accounting. Job Order Cost System The objective: to compute the cost per job. Measures costs as long as each job completed not as long as set time periods. SO 1: Explain the characteristics in addition to purposes of cost accounting.
Process Cost System Used when a large volume of similar products are manufactured – Cereal, Automobiles, Compact Discs, Paint. Production is continuous. Costs are accumulated as long as a specific time period A week or a month . Costs are assigned to departments or processes as long as a set period of time. SO 1 Explain the characteristics in addition to purposes of cost accounting. Process Cost System SO 1 Explain the characteristics in addition to purposes of cost accounting. Cost accounting involves the measuring, recording, in addition to reporting of: a. Product costs. b. Future costs. c. Manufacturing processes. d. Managerial accounting decisions. Review Question Cost Accounting Systems SO 1 Explain the characteristics in addition to purposes of cost accounting.
Job Order Cost Flows The flow of costs direct materials, direct labor, manufacturing overhead – parallels the physical flow of the materials as they are converted into finished goods Manufacturing costs are assigned to Work in Process. An Asset Account Cost of completed jobs is transferred to Finished Goods. An Asset Account When units are sold, the cost is transferred to Cost of Goods Sold. An Expense Account. SO 2 Describe the flow of costs in a job order costing system. Job Order Cost Flows – Overview SO 2 Describe the flow of costs in a job order costing system. Illustration 15-3 Job Order Cost System SO 2 Describe the flow of costs in a job order costing system. Illustration 15-4
Job Order Cost Flow Accumulate the manufacturing costs incurred: Raw Materials, Factory Labor, in addition to Manufacturing Overhead. Assign the accumulated costs to the work done. Two Major Steps in Flows of Costs SO 2 Describe the flow of costs in a job order costing system. Accumulating Manufacturing Cost Raw Materials are debited to Raw Materials Inventory when purchased. At this point, the cost of materials are not assigned to specific jobs or orders. Raw Materials Costs SO 2 Explain the flow of costs in a job order costing system. Example: On January 4, Wallace Manufacturing Company purchases 2,000 h in addition to les at $5 per unit ($10,000) in addition to 800 modules at $40 per unit ($32,000) as long as a total cost of $42,000. Accumulating Manufacturing Cost Consists of: Gross earnings of factory workers, Employer payroll taxes on such earnings, in addition to Fringe benefits incurred by the employer. Companies debit labor costs to Factory Labor as they incur these costs. Factory Labor Costs SO 2: Explain the flow of costs in a job order costing system.
Accumulating Manufacturing Cost Factory Labor Costs (Continued) SO 2: Explain the flow of costs in a job order costing systems. Example: Wallace Manufacturing incurs $32,000 of factory labor costs, of which $27,000 relates to wages payable in addition to $5,000 relates to payroll taxes payable in January. Accumulating Manufacturing Cost Many types of overhead costs For example, machinery repairs, indirect materials, in addition to indirect labor. Debit to Manufacturing Overhead Daily as incurred or Periodically through adjusting entries. Manufacturing Overhead Costs SO 2 Explain the flow of costs in a job order costing system. Accumulating Manufacturing Cost Manufacturing Overhead Costs – Continued SO 2 Explain the flow of costs in a job order costing system.
When incurred, factory labor costs are debited to: a. Work in Process. b. Factory Wages Expense. c. Factory Labor. d. Factory Wages Payable. Review Question Accumulating Manufacturing Costs SO 2 Explain the flow of costs in a job order costing system. Assigning Manufacturing Costs to Work In Process Manufacturing costs are assigned to Work in Process with: Debits to Work in Process Inventory Credits to Raw Materials Inventory Factory Labor Manufacturing Overhead An essential accounting record in assigning costs to jobs is a job cost sheet. SO 3 Explain the nature in addition to importance of a job cost sheet. Assigning Manufacturing Costs to Work In Process Job cost sheet Used to record costs of a specific job. Used to determine the total in addition to unit costs of a completed job. Postings to job cost sheets are made daily. The job cost sheet is the subsidiary ledger as long as the control account Work in Process. Each entry to a Work in Process Inventory must be accompanied by a corresponding posting to one or more job cost sheets. SO 3 Explain the nature in addition to importance of a job cost sheet.
Assigning Manufacturing Costs to Job Cost Sheet SO 3 Explain the nature in addition to importance of a job cost sheet. Illustration 15-5 Assigning Manufacturing Costs to Work In Process Assigning Raw Materials Cost Assigned to a job when materials are issued. A materials requisition slip. Written authorization as long as issuing raw materials. May be directly issued to use on a job – direct materials. May be considered indirect materials part of manufacturing overhead. SO 3 Explain the nature in addition to importance of a job cost sheet. Assigning Manufacturing Costs to Work In Process Materials Requisition Slip SO 3 Explain the nature in addition to importance of a job cost sheet. Illustration 15-6
Base Calculation DL Cost $900,000 ÷ $500,000 = 180 % DL Hours $900,000 ÷ 50,000 = $18/DL hour Machine Hrs $900,000 ÷ 100,000 = $9/Mach hour Marquis Company estimates that annual manufacturing overhead costs will be $900,000. Estimated annual operating activity bases are: Direct labor cost $500,000; Direct labor hours 50,000; in addition to Machine hours 100,000. Compute the predetermined overhead rate as long as each activity base. Chapter Review Brief Exercise 15-6 Work in Process Inventory 16,200 Raw Materials Inventory 16,200 Work in Process Inventory 12,000 Factory Labor 12,000 Work in Process Inventory 14,200 Manufacturing Overhead 14,200 Milner Company is working on two job orders. The job cost sheets shows the following: JOB 201 JOB 202 Direct Materials $ 7,200 $9,000 Direct Labor $ 4,000 $8,000 Manufacturing Overhead $5,200 $9,000 Prepare the three summary entries to record the assignment of the costs to Work in Process from the data on the job cost sheets. Chapter Review Do It! 15-2 Copyright © 2011 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful. Request as long as further in as long as mation should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies as long as his/her own use only in addition to not as long as distribution or resale. The Publisher assumes no responsibility as long as errors, omissions, or damages, caused by the use of these programs or from the use of the in as long as mation contained herein. Copyright
Spiegel, Matt Host
Spiegel, Matt is from United States and they belong to Matt Spiegel Show, The and they are from Scottsdale, United States got related to this Particular Journal. and Spiegel, Matt deal with the subjects like Sports
Journal Ratings by Capitol College
This Particular Journal got reviewed and rated by Capitol College and short form of this particular Institution is US and gave this Journal an Excellent Rating.