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ch3 - Managerial Accounting Chapter Three Job Order Costing...

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Managerial Accounting Chapter Three - Job Order Costing
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Chapter Three Highlights Process vs Job Order Costing (JOC) ID Documents used in JOC Compute Overhead Rates Journal entries related to JOC including Direct Materials, Direct Labor, Mfg Overhead Calculation of under/over applied overhead
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Costing Systems Unit cost are important for budgeting, operational control, product line decisions, and for setting selling prices of goods or services 2 types of costing system provide unit costs: process costing and job order costing
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Process Costing System used when a single homogeneous product is produced total Mfg cost for a period of time is divided by total units produced = per unit cost example: cement producers would use a process cost system
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Job Order Costing Used when a company produces a variety of products in different batches (i.e.. Movie studios) costs are assigned to each project example: custom home builder would use a job order costing system
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Job Order Costing - The Details A job cost sheet is used to collect the details of the costs incurred on a specific job This sheet includes a project name and identifying number Also included on this sheet would be the details of the DM, DL and overhead costs assigned to the completed the project
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Materials Cost A materials requisition form filled out to withdraw materials out of raw materials store area slip identifies the type of materials taken and quantity Also included is the job identifier
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Materials Cost requisitions can be used to record materials cost note: indirect materials are charged to general Mfg overhead
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Direct Labor Costs Time sheets are used to track employee(s)
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