250_Notes_4B

250_Notes_4B - ACCT 250 ACCOUNTING FOR DECISION MAKING...

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ACCT 250 – ACCOUNTING FOR DECISION MAKING NOTES – CHAPTER 4B SPRING 2008 SUMMARY Here we compare actual costing to normal costing and examine some more advanced topics: accounting for spoilage, rework and scrap; and operation costing. NOTES 1) Accounting for waste of resources – spoilage, rework and scrap Key issue is the distinction between normal and abnormal amounts of waste a) Three classifications Normal, relating to one job Normal, relating to more than one job Abnormal 2) Operation costing Used for what type of manufacturers? a) The details Direct materials Direct labor Overhead o Overhead pool allocated based on units of production within each dept 07ba49eacf6a49a5c81e47aa27a7e51e308298dd.doc PAGE 1 OF 2
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Unformatted text preview: ACCT 250 ACCOUNTING FOR DECISION MAKING NOTES CHAPTER 4B SPRING 2008 b) The accounts and JEs Department A requisitions materials for Job 927 Conversion costs are applied in Department A Job 927 is transferred from Department A to Department B Department B incurs actual direct labor costs Job 927 is transferred from Department B to Finished goods inventory The overhead accounts in question Conversion costs Dept X Conversion costs applied- Dept X 3) Actual costing Differs from normal costing in one primary way POHR = What are the implications of using actual costing? 07ba49eacf6a49a5c81e47aa27a7e51e308298dd.doc PAGE 2 OF 2...
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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_4B - ACCT 250 ACCOUNTING FOR DECISION MAKING...

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