Cost Accounting Foundations and Evolutions Kinney, Prather, Raiborn

صفحه 1:
Cost Accounting Foundations and ٌ Evolutions Kinney, Prather, Raiborn Chapter 4 Job Order Costing 0 000 7 

صفحه 2:
* Contrast the job order and process Colosimo ten RENTS valuation methods * Define what the term ‘job’ means: ¢ Explain the purpose of the documents used in a job order costing system 

صفحه 3:
* List the journal entries used to accumulate costs in a job order costing system * Identify how technology impacts. the gathering and use of information in job order costing systems 

صفحه 4:
* Explain how standard costs are used in a job order costing system * Describe how job order costing information supports management decision making ۰ Explain how losses are treated ina job order costing system 

صفحه 5:
ie. ۰ Job Order 00: 8 Process on ۳2211 ۳ 0 Large ١ ‏و بو‎ quantities ae 0 * Homogeneous tailor-made goods products ۰ Tracks costs by * User-specific se oom Lee services by department ٠ Tracks costs by job 

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ie. ۰ 5 ¢ Ajob is a single unit or group of units identifiable as being produced to distinct customer specifications * Ajob can be a - Client - Engagement - Project - Contract 

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۹ ۰ 5 * Cost Accumulation System defines - cost object - method of assigning costs to production * Valuation Method specifies - how product costs will be measured 

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OSTING SYSTE Job Order Process * Actual * Actual * Normal ° Normal * Standard * Standard 2 ات ۱-3 

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ie. ۰ 5 * Each job is a cost object * Costs are accumulated for each job * A job can consist of one or more units of output * There is a subsidiary ledger for each job 

صفحه 10:
‎en a ag‏ اك سمت 02100 _ © ‎an rs‏ ۱۳ 300 0 ۹" ‎Job 2 20‏ 0۳ ‎Total 800‏ ‏2 الاك = 9 طامل + © طول + 0 تاصل 

صفحه 11:
* Tracks who is responsible for materials * Verifies flow of materials from warehouse to department to job 

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ie. ۰ 5 * All financial information about a job - direct material (from material requisition) - direct labor (from time sheets or labor tickets) - applied overhead - budgeted cost information * When job is complete, use job order cost sheet to analyze actual costs to budgeted costs 

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* Time worked on each job 

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ie. ۰ 5 ی * Automate data collection and data 9 * Accounting software includes job costing modules * Share information using intranet 

صفحه 15:
ie. ۰ 5 Restricted network for sharing information and delivering data from corporate databases to local- area network (LAN) desktops 

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ie. ۰ 5 * Actual cost * Normal cost ۰ ۹0270 0۲ - Predetermined norms (or standards) for materials, labor, and overhead - Compare actual costs to standard CoLoXy REMC NUiKyacy NOM ECM TarVoeo 

صفحه 17:
* Estimate future job costs * Establish realistic bids and selling prices * Develop budgets and standards * Compare actual costs to estimated costs * Determine which jobs are profitable ° Manage inventory 

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° Shrinkage - Evaporation ee cel Te - Oxidation ¢ Production errors - Defects can be economically reworked - Spoilage cannot be economically ‏سفنت‎ 

صفحه 19:
ie. ۰ 5 * Normal Loss - expected during production ¢ Abnormal Loss - exceeds that expected during production 

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صفحه 21:
ie. ۰ 5 * What is the difference between job order and process costing systems? * How do actual, normal, and standard costing valuation methods differ? ۳ * How is the job order cost sheet used? 

Cost Accounting Foundations and Evolutions Kinney, Prather, Raiborn Chapter 4 Job Order Costing Learning Objectives (1 of 3) • Contrast the job order and process costing systems and their valuation methods • Define what the term ‘job’ means • Explain the purpose of the documents used in a job order costing system Learning Objectives (2 of 3) • List the journal entries used to accumulate costs in a job order costing system • Identify how technology impacts the gathering and use of information in job order costing systems Learning Objectives (3of 3) • Explain how standard costs are used in a job order costing system • Describe how job order costing information supports management decision making • Explain how losses are treated in a job order costing system Job Order or Process Costing Job Order • Small quantities • Batches of identifiable, tailor-made products • User-specific services • Tracks costs by job Process • Large quantities • Homogeneous goods • Tracks costs by batch of goods by department Job Order Costing • A job is a single unit or group of units identifiable as being produced to distinct customer specifications • A job can be a – – – – Client Engagement Project Contract Methods of Product Costing • Cost Accumulation System defines – cost object – method of assigning costs to production • Valuation Method specifies – how product costs will be measured Six Possibilities V A L M U E A T T H I O O COSTING SYSTEM Job Order Process • Actual • Normal • Standard • Actual • Normal • Standard Job Order Costing System • Each job is a cost object • Costs are accumulated for each job • A job can consist of one or more units of output • There is a subsidiary ledger for each job Job Order Costing System WIP Subsidiary Ledger Job 1 Job 2 Job 3 500 = Job 1 + Job 2 + Job 3 = 100 200 WIP Control Job 1 Job 2 Job 3 Total 100 200 500 800 WIP Control Material Requisition Form • Tracks who is responsible for materials • Verifies flow of materials from warehouse to department to job Job Order Cost Sheet • All financial information about a job – direct material (from material requisition) – direct labor (from time sheets or labor tickets) – applied overhead – budgeted cost information • When job is complete, use job order cost sheet to analyze actual costs to budgeted costs Employee Time Sheet • Time worked on each job Job Order Costing and Technology • Automate data collection and data entry • Accounting software includes job costing modules • Share information using intranet Intranet Restricted network for sharing information and delivering data from corporate databases to localarea network (LAN) desktops Standard Cost System • Actual cost • Normal cost • Standard cost – Predetermined norms (or standards) for materials, labor, and overhead – Compare actual costs to standard costs - difference is a variance Management Use of Job Order Costing Systems • Estimate future job costs • Establish realistic bids and selling prices • Develop budgets and standards • Compare actual costs to estimated costs • Determine which jobs are profitable • Manage inventory Product and Material Losses • Shrinkage – Evaporation – Leakage – Oxidation • Production errors – Defects can be economically reworked – Spoilage cannot be economically reworked Product and Material Losses • Normal Loss – expected during production • Abnormal Loss – exceeds that expected during production Product and Material Losses Normal Loss Abnormal Loss Loss for most jobs In overhead rate Period cost Loss identified with a specific job Charge to specific job Period cost Questions • What is the difference between job order and process costing systems? • How do actual, normal, and standard costing valuation methods differ? • How is the job order cost sheet used?