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Objective 1
Distinguish Between Job Costing and Process Costing.
Cost Systems
There are two basic systems used by manufacturers to assign costs to their products:
Job order costing Process costing
Chopping
Job Costing
It is used by a manufacturer who produces products as individual units or in distinct batches or jobs.
$500 10 = $50/chair
Job Costing
Job cost record is a document used to accumulate the costs of a job.
Job Number: J9738 Date Promised: 9/11/06 Customer: Miami Motors Date Started: 8/03/06 Job Description: 300 automobile engine valves Engineering Design Number: JJJ-100
Quantity
Bar steel 720 lbs stock 3 A35161 Subassemblies 290 units Total direct materials cost:
Number
Rate Amount $28 $ 672 $26 1,664 $18 2,160 $17 1,037
$5,533
Total cost $39,237 Number of units produced 300 Cost per unit $130.79
Objective 2
Trace Materials and Labor in a Manufacturers Job Costing System.
Materials Cost
Companies using job costing often use a perpetual system to account for direct materials. A materials requisition is used to request transfer of materials to the production floor.
Labor Costs
Labor costs are accumulated using the payroll register and time records. Labor time records identify the employee, the amount of time spent, and the cost charged to each job.
Objective 3
Allocate Manufacturing Overhead in a Manufacturers Job Costing System
Objective 4
Account for Completion and Sales of Finished Goods, and Adjust for Under-orOverapplied Manufacturing Overhead
74,800
44,800
Objective 5
Assign Noninventoriable Costs in Job Costing.
End of Chapter 20