250_Notes_4A

250_Notes_4A - ACCT 250 ACCOUNTING FOR DECISION MAKING NOTES CHAPTER 4A SPRING 2008 SUMMARY Here we examine the basics of job-costing systems using

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ACCT 250 – ACCOUNTING FOR DECISION MAKING NOTES – CHAPTER 4A SPRING 2008 SUMMARY Here we examine the basics of job-costing systems using normal costing, focusing on the capture, allocation, and disposition of factory overhead. NOTES 1) How are costs tracked to jobs? What is a job ? Why do we care how much it cost to complete a job? a) The easy ones…Direct materials and Direct labor A requisition is required to obtain materials from the raw materials warehouse Employee time cards capture the “jobs” on which employees worked Accounting department uses these inputs to allocate costs to jobs via JE b) Factory overhead Indirect costs can’t be directly traced to a job, so must be allocated Need to pick an allocation base – should be a cost driver for actual overhead o Typically DL hours, DL cost or Machine hours in a volume based system o Which is driver of overhead? If no driver, look for correlation – BE4-23 POHR = Allocate factory overhead cost to jobs based on units of the driver used
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This note was uploaded on 04/18/2008 for the course ACCTG 250 taught by Professor Rabe during the Spring '08 term at Luther.

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250_Notes_4A - ACCT 250 ACCOUNTING FOR DECISION MAKING NOTES CHAPTER 4A SPRING 2008 SUMMARY Here we examine the basics of job-costing systems using

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