Job Order Costing System
Job order costing system is a system in which single product or batches of products are assigned with manufacturing costs. Job order costing system is in use when the manufactured are of different types. Job order costing system includes the use of direct material, direct labor divided by the number of units produced to reach the average cost per unit of the product.
Predetermined Overhead Rate and Capacity: Companies typically base their predetermined overhead rates on the estimated, or budgeted, amount of allocation base for the upcoming period. This is the method that is used in this chapter, but it is practice that is recently come under
Recording Cost of Goods Manufactured and Sold in Job Order Costing: Cost of Goods Manufactured (COGM): When a job has been completed, the finished out put is transferred from the production department to the finished goods warehouse. By this time, the accounting department will
Recording Non-manufacturing Costs in a Job Order Costing System: In addition to manufacturing costs, companies also incur marketing and selling costs. These costs should be treated as period expenses and charged directly to the income statement and therefore should not go into the the
Use of Information Technology in Job Order Costing System: Learning objectives of the articles: What are advantages of using bar code technology in job order costing system. Bar code technology can be used to record labor time–reducing the drudgery in that task and increasing
Over-applied and Underapplied Overhead Learning objectives of this article: Define, explain and calculate under-applied and over-applied overhead rate. Give an example. Definition and Explanation of Over and Underapplied Overhead: Since the predetermined overhead rate is established before a period begins and is based entirely
Multiple Predetermined Overhead Rates: Learning Objectives of the Article: What are multiple predetermined overhead rates? What is the need of calculating multiple predetermined overhead rates? When a single predetermined overhead rate is used for entire factory it is called plant wide overhead rate. This
Disposition of Underapplied or Overapplied Overhead Balances: Learning objective of the article: How is over and under applied overhead is disposed off. Give an example to explain the procedure? What disposition should be made of an underapplied overhead or overapplied overhead balance remaining in
Measuring Direct Labor Cost in Job Order Costing System: Learning objective of this article: What is a labor time ticket? Give an example of labor time ticket. How direct labor cost is measured and recorded on job cost sheet in a job order costing
Measuring Direct Materials Cost in Job Order Costing System: Learning objective of this article: What is a materials requisition form. Give an example of materials requisition form. What is a job cost sheet. Give an example of job cost sheet. How direct materials cost
Application of Manufacturing Overhead Cost in Job Order Costing: Learning objective of this article: Define and explain predetermined manufacturing overhead applied to work in process rate, how is it calculated? How manufacturing overhead is recorded on a job cost sheet and is applied to
Job Order Costing Questions and Answers: Questions: Cost accounting is said to consist of three different phases. Name them. See answer. Name four control accounts concerned primarily with cost determination. See answer. What subsidiary record or ledger supports each of the control accounts mentioned
Job Order Costing in Service Companies: Job order costing is also used in service organizations such as law firms, movie studios, hospitals, and repair shops, as well as manufacturing companies. In a law firm, for example, each client represents a “job,” and the costs
Job Order Costing – The Flow of Cost: Learning objective of this article: Understand the flow of costs in a job order costing system and prepare appropriate journal entries to record cost. Apply overhead cost to work in process using a predetermined overhead rate.
Exercise 1– Cost accumulation Procedure Determination Exercise 2– Job order cost sheet Exercise 3– Job order costing-T Accounts and Journal Entries Exercise 4– Job Order Cycle Entries Exercise 5– Journal entries, T Accounts, Over and Under applied overhead Income Statement Exercise 1–Cost accumulation procedure
Job Order Costing System-Case Study: Case A: Job Order Costing; General and Factory Ledger Case B: Determination of Cost Case C: Improving a Cost Information and Accumulation System Case D: Installing a Cost Information and Accumulation System Case E: Designing Cost Accumulation Procedures Job
Advantages and Disadvantages of Job Order Costing System: Learning objectives of the article: What are the advantages and disadvantages of job order costing system? One of the primary advantages of job order costing system is that the management team has ready access to all
Job Order Costing System: After studying job order costing system chapter you should be able to: Distinguish between process costing and job order costing and identify companies that would use each costing method. Identify the documents used in job order costing system. Compute predetermined
