Lecture 3 - 11 Aug 2008 - 6 slides per page

Lecture 3 - 11 Aug 2008 - 6 slides per page - Topic 4 Types...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1 1 Topic 4 Job Costing Product & Service Costing 2 Objectives To understand and be able to explain: z the nature of costing system s generally z types of Cost Accumulation Systems * Job and Process - how are costs accumulated? * Actual, Normal, and Standard Costing Systems - How are the costs measured? z Job Costing using actual costing and normal costing * cost flows and relevant documents * journal entries 3 Product Costing z Product costing is the process of accumulating, classifying and assigning direct direct materials (DM), direct labour (DL) and manufacturing overhead (O/H) costs manufacturing overhead (O/H) costs to products or services. z Several different types of product costing systems systems are available depending on * the nature of the production environment , * the cost measurement method chosen , and * the method of overhead assignment chosen 4 Types of Costing Systems Used to Determine Product Costs Process Costing Job-order Costing z Typical job order cost applications: ± Special-order printing ± Building construction z Also used in the service industry ± Hospitals ± Law firms Types of Costing Systems Used to Determine Product Costs Job-order Costing Process Costing ) Many units of a single, homogeneous product flow evenly through a continuous production process. ) One unit of product is indistinguishable from any other unit of product. . ) Each unit of product is assigned the same cost (average cost). Topic 7 6 Types of Costing Systems Used to Determine Product Costs Typical process cost applications: ± Soft drink manufacturer ± Theater/Cinema Typical process cost applications: ± Soft drink manufacturer ± Theater/Cinema Job-order Costing Process Costing
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2 7 Sequence of Events in a Job-Order Costing System Receive orders from customers Schedule jobs Order materials Begin production The job in this system is driven by the customer. For example: 8 Job-Order Costing We need to know three things: { The cost components of the job/order { The source documents to identify these components { How to classify these cost costs in terms of direct and indirect costs 9 Job-Order Costing THE JOB Direct material Direct labour T ra c e d ire tly to a h jo b r ir Manufacturing overhead (OH) Applied to each job 10 Job-Order Costing Document Flow Summary Job Cost Sheets Materials Requisition Direct materials Indirect materials Manufacturing Overhead Account Materials used may be either direct or indirect. 11 Direct Materials DMs are materials that become an integral part of the product and that can be conveniently traced directly to the product. DM cost = Cost of material + in-transit costs •Acquisition (initial) cost; Freight; insurance; storage (before delivery); less discounts and allowances. Manufacturing overhead = Costs of purchasing; receiving; inspecting; and storing less scrap revenue 12 Job-Order Costing Document Flow Summary Job Cost Sheets Employee Time Ticket Manufacturing Overhead Account Direct Labour Indirect Labour An employee’s time may be either direct or indirect.
Background image of page 2
3 13 Direct Labour
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/07/2009 for the course ACCT 2102 taught by Professor Unknown during the Three '08 term at Queensland.

Page1 / 10

Lecture 3 - 11 Aug 2008 - 6 slides per page - Topic 4 Types...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online