Chapter 15 Notes A cost accounting system collects costs and assigns them to products and services. It is critical that managers know now much it actually costs to make a product or deliver a service in order to determine how to price it. Job Order ProductionWhen a manufacturer customizes a product for a particular customer it is generally done on a JOB ORDER production process. This is opposed to mass production or assembly line production where products are homogeneous and generally not distinguishable until the final process (i.e. cars are mass produced and the final step is usually the color). Events in job order costing: First step is to estimate the costs to complete the job. Next you negotiate a Sale price to the customer.Third is scheduling the manufacturer of the product Finally the manufacturer will place its own orders for raw materials and supplies if needed. Job Cost SheetThis is a separate RECORD maintained for each job. It identifies the customer, the job number, the product and key dates to achieve completion. ALL COSTS INCURRED ARE RECORD ON THIS SHEET as DIRECT MATERIALS, DIRECT LABOR or OVERHEAD. The JOB shows up in Goods in Process (WIP) while it is being completed and when finished it moves into FINISHED GOODS. When the job is actually sold to the customer, the job cost sheet is evidence of the total costs incurred andmanagement can evaluate whether the job was profitable or not. Evidence of the materials used on a job is indicated by a MATERIALS LEDGER CARD which simply tracks the cost and quantity of materials that went into the job. Evidence of direct labor is collected via CLOCK CARDS which is simply a collection of total wages earned by the factory workers, Then we have a TIME TICKET which assigns the labor to specific jobs OR overhead.