Click here to load reader

Job-Order Costing

  • View
    60

  • Download
    2

Embed Size (px)

DESCRIPTION

CHAPTER. Job-Order Costing. Objectives. 1. Describe the differences between job-order costing and process costing, and identify the types of firms that would use each method. 2. Identify and set up the source documents used in job-order costing. - PowerPoint PPT Presentation

Text of Job-Order Costing

Libby, Libby and Short5 -*
1. Describe the differences between job-order costing and process costing, and identify the types of firms that would use each method.
2. Identify and set up the source documents used in job-order costing.
3. Describe the cost flows associated with job-order costing.
4. Appendix: Prepare the journal entries associated with job-order costing.
Objectives
Chapter 1 -
Characteristics of Job-Order Costing
Wide-variety of services or products that are quite distinct from each other
Cost accumulated by job
Unit cost computed by dividing total job costs by units produced on that job
BEAT
SOUTH
HIGH
Produce large quantities of similar or homogeneous products
Cost accumulated by process or department for a given period of time
Unit cost computed by dividing process costs of period by the units produced in the period
Chapter 1 -
Beginning balance $58,600 $51,300 $ 0 $109,900
Current costs:
Direct materials 4,800 3,600 23,500 31,900
Direct labor 6,000 9,000 10,000 25,000
Applied overhead 2,400 3,600 4,000 10,000 Total $71,800 $67,500 $37,500 $176,800
Job-Order Costing
This information is used to determine the total cost of goods manufactured.
Chapter 1 -
Job-Order Cost Sheet
A job-cost sheet is a document used to accumulate the cost for a specific job in a job-cost system
Job Cost Sheet
3 75 oz. @ $1.40 = 105
July 1 3 hrs. @ $10.00 = $ 30
3 7 hrs @ $10.00 = 70
July 7 10 dlh x $2 = $ 20
Chapter 1 -
Jim Lawson
Johnson Leathergoods
Authorized Signature
Start Time Stop Time Total Time Hourly Rate Amount Job Number
Jim Lawson
4
Chapter 1 -
Chapter 1 -
Accounting for Overhead
Actual overhead costs are never assigned directly to jobs. Overhead is applied using a predetermined overhead rate.
$9,600
4,800
Estimated Overhead
Overhead rate =
Other 2,400 Direct labor hours 4,800
$3,000 ÷ 100 = $30 per purchase order
$4,200 ÷ 2,800 = $1.50 per machine hour
$2,400 ÷ 4,800 = $0.50 per direct labor hour
Chapter 1 -
Backpacks:
Briefcases:
Purchasing:
Machining:
Other:
Chapter 1 -
Actual Overhead
Lease $200
Utilities 50
Total cost Total cost
Unit cost Unit cost
Chapter 1 -
Chapter 1 -
For the Month Ended January 31, 2004
Direct materials:
Total raw materials available for use $2,500
Ending raw materials 1,000
Direct labor 1,530
Total manufacturing cost $3,370
Cost of goods manufactured $2,320
Chapter 1 -
Beginning finished goods inventory $ 0
Cost of goods manufactured 2,320
Cost of goods available for sale $2,320
Less: Ending finished goods inventory 0
Normal cost of goods sold $2,320
Add: Underapplied overhead 75
Chapter 1 -
Sales $3,480
Gross margin $1,085
Selling expenses $200
Johnson Leathergoods
Chapter 1 -
1. Materials costing $2,500 were purchased on account.
The receiving report and the invoice are used to record the receipt of the merchandise and to control the payment.
1 Materials 2 500 00
Accounts Payable 2 500 00
Johnson Leathergoods
Chapter 1 -
2. Materials costing $1,500 were requisitioned for use in production.
The receiving report and the invoice are used to record the receipt of the merchandise and to control the payment.
2 Work in Process 1 500 00
Materials 1 500 00
3. Direct labor costing $1,530 was recognized.
The receiving report and the invoice are used to record the receipt of the merchandise and to control the payment.
3 Work in Process 1 530 00
Wages Payable 1 530 00
Johnson Leathergoods
Chapter 1 -
5 -*
4. Overhead was applied to production at the rate of $2 per direct labor hour. A total of 170 direct labor hours were worked.
The receiving report and the invoice are used to record the receipt of the merchandise and to control the payment.
4 Work in Process 340 00
Overhead Control 340 00
5 -*
5. Actual overhead costs of $415 were incurred: lease, $200; utilities, $50; depreciation, $100; accrued wages, $65.
The receiving report and the invoice are used to record the receipt of the merchandise and to control the payment.
5 Overhead Control 415 00
Lease Payable 200 00
Utilities Payable 50 00
Accumulated Depreciation 100 00
Wages Payable 65 00
6. The backpacks were completed and transferred to finished goods.
The receiving report and the invoice are used to record the receipt of the merchandise and to control the payment.
6 Finished Goods 2 320 00
Work in Process 2 320 00
Johnson Leathergoods
Chapter 1 -
7. The backpacks were sold at cost plus 50 percent.
The receiving report and the invoice are used to record the receipt of the merchandise and to control the payment.
7 Cost of Goods Sold 2 320 00
Finished Goods 2 320 00
Johnson Leathergoods
Sales Revenue 3 480 00
Chapter 1 -
8. Underapplied overhead was closed to cost of goods sold.
The receiving report and the invoice are used to record the receipt of the merchandise and to control the payment.
8 Cost of Goods Sold 75 00
Overhead Control 75 00
Work in Process
Work in Process
Work in Process
Johnson Leathergoods
(7) Cost of goods sold for Job 1 and revenue from sale on account
Finished Goods
(6) 2,320
Job: 20 Backpacks Job: 10 Briefcases
Direct materials$1,000Direct materials$500
Direct labor1080Direct labor450
Overhead applied240Overhead applied100
Total cost$2,320Total cost$1,050
Unit cost$116Unit cost
Finished Goods Account
Job: 20 Backpacks Job: 10 Briefcases
Direct materials1,000$ Direct materials500$
Direct labor1,080 Direct labor450
Unit costUnit cost
Job: 20 Backpacks Job: 10 Briefcases
Direct materials$1,000Direct materials$500
Direct labor1,080Direct labor450
Overhead applied240Overhead applied100
Total costTotal cost
Unit costUnit cost
Job: 20 Backpacks Job: 10 Briefcases
Direct materials1,000Direct materials$500
Direct laborDirect labor
Overhead appliedOverhead applied
Total costTotal cost
Unit costUnit cost