JOB ORDER COSTING

General Accounting System

Records manufacturing activity periodically, measures costs using end-of-period physical counts, and delays cost information until inventory is counted.

Cost Accounting System

Continuously records manufacturing activities, provides timely cost information, and includes job order and process _____ accounting systems.

Job Order Manufacturing

producing unique products individually designed to meet the needs of each customer

job

A unique customized product is a ____

A _____ involves producing more than one unit of a unique product

job lot

Job Order Cost Documents

Store detailed cost data controlled by general ledger accounts and allow for the accumulation of costs by job and the computation of total job cost and cost per unit

Job Cost Sheet

Classifies costs as direct materials, direct labor, or overhead; keeps job cost sheets in goods in process during production; and moves them to finished goods when jobs are completed

Receiving Report

used to record the quantity and cost of items received

Material Ledger Card

are perpetual records updated each time units are purchased and/or issued into production

Job Cost Sheet

accumulates the cost of direct materials as they are placed into production

Indirect Material Ledger Card

   accumulates indirect materials for factory O/H account

Materials Requisition

Submitted when materials are needed in production

Clock Cards

used by employees to record hours worked in a pay period

Time Tickets

used to record time spent on each job

Job Cost Sheet

accumulates the cost of direct labor as they are incurred in production

Indirect Labor Card.              

accumulates indirect labor for factory overhead account

Overhead (O/H)

includes all manufacturing costs other than direct materials and direct labor

Materials Requisitions

for indirect materials

Time Tickets

for indirect labor

Vouchers

for supplies, utilities, etc

Adjusting Entries

depreciation

Factory Overhead

account that accumulates costs until they are allocated to specific jobs

Job Cost Sheet

shows overhead costs that have been applied using a predetermined factory overhead rate

Predetermined Overhead Allocation Rate

Estimated OH cost / Estimated Act. Cost 

Summary of Manufacturing Cost Flows

1.              Into Raw Materials for purchases

2.              From Raw Materials to Goods in Process (direct) and Factory Overhead (indirect)

3.              Into Factory Payroll for labor

4.              From Factory Payroll to Goods in Process (direct) and Factory Overhead (indirect)

5.              Into Factory Overhead from other accounts (insurance, rent, depreciation, utilities, etc.)

6.              From Factory Overhead to Goods in Process as overhead costs are applied using the predetermined overhead rate

7.              From Goods in Process to Finished Goods as jobs are done

8.              From Finished Goods to Cost of Goods Sold

9.              Adjust for under or over applied overhead

Adjusting for Overapplied and Underapplied Overhead

Overhead applied rarely equals that actually incurred because a predetermined overhead rate is used in applying factory overhead costs to jobs

Under applied Overhead

It creates _____ overhead, which is shown as a debit balance in Factory Overhead and then closed to Cost of Goods Sold (COGS).

Overapplied Overhead

It creates overapplied overhead, shown as a credit balance in Factory Overhead, which is then closed to Cost of Goods Sold (COGS).