Date post: | 24-Dec-2015 |
Category: |
Documents |
Upload: | lily-murphy |
View: | 235 times |
Download: | 4 times |
19 - 1
PowerPoint Authors:Susan Coomer Galbreath, Ph.D., CPACharles W. Caldwell, D.B.A., CMAJon A. Booker, Ph.D., CPA, CIACynthia J. Rooney, Ph.D., CPA
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter 19
Job Order Cost Accounting
19 - 2
ProcessCosting
JobCosting
Used for production of large, unique, or high-cost items.
Built to order rather than mass produced.
Many costs can be directly traced to each job.
Used for production of large, unique, or high-cost items.
Built to order rather than mass produced.
Many costs can be directly traced to each job.
Cost Accounting Systems
Chapter 20
C 1
19 - 3
ProcessCosting
JobCosting
Typical job order cost applications: Special-order printing Building construction
Also used in service industry Hospitals Law firms
Typical job order cost applications: Special-order printing Building construction
Also used in service industry Hospitals Law firms
Chapter 20
Job Order ProductionC 1
19 - 4
Receive order from
customer.
Predict cost to complete
job.
Negotiate a sales price and decide whether to
pursue the job.
Schedule production of
the job.
Events in Job Order CostingC 1
19 - 5
Goods in Process
Cost of GoodsSold
Labor
Materials
Ind
irec
tIn
dir
ect
FinishedGoods
FactoryOverhead
Direct
Direct
Allocate
Job Order Production ActivitiesC 1
19 - 6
Road Warriors Job Cost Sheet
Customer Carroll Connor Job No. B15Address 1542 High Point Dr. Malibu, CaliforniaJob Description Level I Alarm System on Ford Expedition Date promised 3/15/13 Date started 3/3/13 Date completed
Direct Materials Direct Labor Factory OverheadDate Req. Cost Date Ticket Cost Date Rate Cost
3/7/13 R-4705 225$ 3/8/13 L-3479 60$ 3/08/13 160% 96$
Total 225$ Total 60$ Total 96$
Remarks Cost SummaryDirect Materials 225$ Direct Labor 60 Factory Overhead 96$ Total Cost 381$
Job Cost SheetP 3
19 - 7
Road Warriors uses a predetermined overhead rate (POHR) based on direct labor cost to apply overhead to jobs.
Estimated total manufacturingoverhead cost for the coming period
Estimated total direct labor costsfor the coming period
POHR =
POHR = = 160% of direct labor $$200,000
$125,000
Predetermined Overhead RateP 3
19 - 8
Materials Ledger CardsMaterials
Ledger CardsMaterials Ledger CardsMaterialsRequisition
Direct materials
The materials requisition
indicates the cost of direct materials
to charge tojobs
and the cost of indirect materials
to charge to overhead.
Indirect materials
Job Cost Sheets
Job Cost Sheets
Job Cost Sheets
Job Cost Sheets
Factory Overhead Account
Material Cost Flows and DocumentsP 1
19 - 9
Employee time tickets indicate
the cost of direct laborto charge to
jobsand the cost
of indirect labor to charge to
overhead.
Job Cost Sheets
Factory Overhead Account
Job Cost Sheets
Job Cost Sheets
Job Cost Sheets
Direct Labor
Indirect Labor
Employee Time TicketEmployee Time
TicketEmployee Time TicketEmployee Time
Ticket
Labor Cost Flows and DocumentsP 2
19 - 10
MaterialPurchases
DirectMaterial
DirectMaterial
Raw Materials
Factory Overhead
ActualOverhead
Costs
Indirect Material
Dr Cr
Dr Cr
Summary of Cost FlowsP 1
Goods in Process Dr Cr
19 - 11
Incurred DirectMaterial
Actual Applied factory factoryoverhead overhead
=/an adjustment is needed.
We will look at how to accomplish this later.
When
Goods in ProcessFactory Payroll
Factory Overhead
DirectLabor
DirectLabor
Indirect Labor
ActualOverhead
Costs
Overhead
OverheadApplied to
Work inProcess
Dr Cr
Dr Cr Dr Cr
Summary of Cost FlowsP 2
P 3
19 - 12
DirectMaterialDirectLabor
Overhead
Cost ofGoodsMfd.
Cost ofGoodsMfd.
Cost ofGoodsSold
Cost ofGoodsSold
Goods in Process Finished Goods
Cost of Goods Sold Dr Cr
Dr Cr Dr Cr
Summary of Cost FlowsP 3
19 - 13
Overhead Application
Overhead is notincurred uniformly
during the year.
Actual overhead rateActual overhead ratemight vary from might vary from month to month.month to month.
Predetermined ratemakes it possible to
estimate job costs sooner.
Reasons for using a POHRReasons for using a POHR(predetermined overhead rate)(predetermined overhead rate)
P 4
19 - 14
Overhead is overapplied.
Overheadapplied to
Work in Process
(POHR × Activity)
Actualoverhead
costsincurred
Adjustment of Overapplied or Underapplied Overhead
P 4
19 - 15
Overhead is underapplied.
Actualoverhead
costsincurred
Overheadapplied to
Work in Process
(POHR × Activity)
Adjustment of Overapplied or Underapplied Overhead
P 4
19 - 16
Cost of Goods
Overhead is: Sold is: Adjustment will:
Actual overhead > applied overhead
Underapplied Too lowIncrease Cost of Goods Sold
Actual overhead < applied overhead
Overapplied Too highDecrease Cost of Goods Sold
Adjusting Cost of Goods Sold for underapplied or overapplied overhead
Adjustment of Overapplied or Underapplied Overhead
P 4