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Akuntansi Biaya - Mercu Buana University Si · PDF fileJob Order Costing Ekonomi dan Suryadharma Sim, SE, ... job order costing system when a company sells many different products

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    Program Studi

    Akuntansi Biaya Job Order Costing

    Suryadharma Sim, SE, M. Ak

    04 Ekonomi dan


    S1 Manajemen

  • Job Order Costing

    Overview of Job Order Costing In job order costing, or job costing, production costs are accumulated for each separate job; a job is the output identified to fill a certain customer order or to replenish an item of stock on hand. This differs from process costing, in which costs are accumulated for an operation or a subdivision of the company, such as department. For job costing to be effective, jobs must be separately identifiable. Details about a job are recorded on a job order cost sheet, or simply cost sheet, which can be in paper or electronic form. Although many jobs may be worked on simultaneously, each cost sheet collects details for one specific job.

  • Job Order Costing

    The record keeping and cost assignment problems are more complex in a

    job order costing system when a company sells many different products and

    services than when it has only a single product or service. Since the products

    are different, the costs are typically different. Consequently, cost records

    must be maintained for each distinct product or job. For example an attorney

    in a large criminal law practice would ordinarily keep separate records of the

    costs of advising and defending each of her clients. And a clothing factory

    would keep separate track of the costs of filling orders for particular styles,

    sizes, and colors of jeans. A job order costing system requires more effort

    than a process costing system. Companies classify manufacturing costs into

    three broad categories: (1) direct materials, (2) direct labor, (3) manufacturing


  • Job Order Costing

    Accounting for Materials Materials Purchased Cost accounting for purchased materials is the same as it is for any perpetual inventory system. As materials are received, the account Materials is debited (rather than Purchases, in a periodic inventory system). Rayburn Company received a shipment of $25,000 of purchased materials on January 5. The journal entry is: Materials 25,000 Accounts Payable 25,000 Materials Used The flow of direct materials from storeroom to factory is accounted for as a transfer of cost from Materials to Work in Process. Often this is done in summary from at the end of a month or other period. A total of $31,000 of direct materials were requisitioned in January at Rayburn Company, consisting of $2,510 for Job 5574, $24,070 for Job 5575, and $4,420 for Job 5576. The summary entry is: Direct materials; Work in Process 31,000 Materials 31,000

  • Job Order Costing

    Requisitions also are used in issuing indirect materials or supplies. If not

    used in the factory, supplies are charged to marketing or administrative

    expense accounts. If used in the factory, they are charged to Factory

    Overhead Control. Factory supplies totaling $6,000 were requisitioned

    during January at Rayburn Company. Rayburn Company records these

    requisitions by a monthly summary entry:

    Indirect materials;

    Factory Overhead Control 6,000

    Materials 6,000

  • Job Order Costing

    Accounting for Labor Factory Labor Cost Incurred For each pay period, the liabilities for wages and other payments are journalized and posted to the general ledger. For brevity, suppose Rayburn Company pays factory workers only once each month. Factory payroll of $31,000 is calculated and recorded on January 31 (to be paid in early February). The general journal entry is: Payroll 31,000 Accrued Payroll 31,000 Factory Labor Cost Distributed Most companies distribute labor costs monthly: labor time tickets are sorted by job, entered on job cost sheets, and recorded by summary general journal entries. Rayburns direct labor time tickets from January total $1,568 for Job 5574, $22,832 for Job 5575, and $2,600 for Job 5576. Indirect labor totals $4,000. Rayburn Company records both direct and indirect labor by monthly summary entries: Work in Process 27,000 Payroll 27,000 Factory Overhead Control 4,000 Payroll 4,000

  • Job Order Costing

    Accounting for Factory Overhead Actual Factory Overhead Incurred Some actual overhead costs, such as indirect materials and indirect labor, are recorded when they are incurred or by a periodic summary entries, as illustrated previously. Others, such as depreciation and expired insurance, are recorded only by adjusting entries made at the end of a period. Rayburn Company calculates factory depreciation of $4,929 and expired factory insurance of $516 for the month. The entries for these costs are: Factory Overhead Control 4,929 Accumulated Depreciation-Machinery 4,929 Factory Overhead Control 516 Prepaid Insurance 516

  • Job Order Costing

    Estimated Factory Overhead Applied Rayburn Company has determined that the strongest relationship is between machine hours and factory overhead, and that those two measures are expected to total 7,500 and $300,000, respectively, for the year. These estimates produce a predetermined overhead rate of $40 per machine hour ($300,000 : 7,500). The amount of overhead charged to a job, called applied overhead, is determined by multiplying $40 by the number of machine hours used on that job. The factory overhead applied to all jobs worked on during a period is debited to Work in Process at the end of the period. In addition to the 29.4 machine hours for Job 5574, Rayburn Companys machine logs show 250.6 hours for Job 5575 and 50 hours for Job 5576, for a total of 330 hours used in January. Therefore, applied overhead of $13,200 ($40 x 330) is charged to Work in Process. The offsetting credit can be made directly to Factory Overhead Control, or a separate account, Applied Factory Overhead, can be used, as in the following entry: Work in Process 13,200 Applied Factory Overhead 13,200

  • Job Order Costing

    Applied Factory Overhead usually is closed to Factory Overhead

    Control at year-end, but for illustrative purposes assume Rayburn Company closes Applied Factory Overhead monthly. If the preceding $13,200 journal entry is the only application of overhead for the month, the closing entry is: Applied Factory Overhead 13,200 Factory Overhead Control 13,200

  • Job Order Costing

    Accounting for Jobs Completed and Products Sold As jobs are completed, their cost sheets are moved from the in-process category to a finished work file. Rayburn Company completed Jobs 5574 and 5575 during January at costs of $5,254 and $56,926, respectively. A job for a specific customer can be shipped when completed and thus never enter finished goods inventory; Sales and Cost of Goods Sold are recorded when the job is transferred from Work in Process. Because Job 5574 was shipped immediately to Lawrenceville Construction Company on January 18, it is not included in the entry transferring completed work to Finished Goods. Only Job 5575 is transferred to Finished Goods, and the completion of Job 5574 is recorded by the following entries: Accounts Receivable 7,860 Sales 7,860 Cost of Goods Sold 5,254 Work in Process 5,254 Job 5575 was transferred to Finished Goods to replenish stock, and the entry recording the transfer was made at month-end as follows: Finished Goods 56,926 Work in Process 56,926

  • Job Order Costing

    Rayburn Company shipped finished goods costing $52,300,

    consisting of a portion of Job 5575 and portions of various jobs that were completed in the preceding year. The sales price was $70,000, and the entries are: Account Receivable 70,000 Sales 70,000 Cost of Goods Sold 52,300 Finished Goods 52,300

  • Job Order Costing

    Non-manufacturing Costs:

    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 manufacturing overhead account. To illustrate the

    correct treatment of non-manufacturing costs, assume that the company (in this example)

    incurred $30,000 in selling and administrative salary costs during a months, the following

    entry records these salaries.

    Salaries expense 30,000 Dr

    Salaries and wages payable 30,000 Cr

    Depreciation on factory equipment is debited to manufacturing overhead account but

    depreciation on office equipment is considered a period expense and is not included in

    manufacturing overhead. Assume that depreciation of office equipment during the month

    was $7,000. The entry is as follows.

    Depreciation expense 7,000 Dr

    Accumulated depreciation 7,000 Cr

  • Job Order Costing

    Finally assume that advertising was $42,000 and that other selling and administrative

    expenses during the month was $8,000. The following journal entry records these items:

    Advertising expenses 42,000 Dr.

    Other selling and administrative expense 8,000 Dr.

    Accounts payable 50,000 Cr.

    Since the amounts in entries above all go directly into expense accounts, they will have no

    effect on the costing of the company's production for the month. The same will be true of any

    other selling and administrative expenses incurred during the month including sales

    commission, depreciation on sales equipment, rent on office facilities, insurance on office

    facilities, and related costs.

  • Job Order Costing

    Job Order Costing in Servic