ch15 - Chapte 15 The Navigator Scan Study Objectives Read...

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15 CHAPTER STUDY OBJECTIVES After studying this chapter, you should be able to: 1. Explain the characteristics and purposes of cost accounting. 2. Describe the flow of costs in a job order cost accounting system. 3. Explain the nature and importance of a job cost sheet. 4. Indicate how the predetermined overhead rate is determined and used. 5. Prepare entries for jobs completed and sold. 6. Distinguish between under- and overapplied manufacturing overhead. The Navigator PREVIEW OF CHAPTER 15 This chapter illustrates how manufacturing costs are assigned to specific jobs. We begin the discussion in this chapter with an overview of the flow of costs in a job order cost accounting system. We then use a case study to explain and illustrate the documents, entries, and accounts in this type of cost accounting system. The content and organization of this chapter are as follows: JOB ORDER COST Cost Accounting Systems Accumulating Manufacturing Costs Assigning Manu- Work in Process facturing Costs to Job Order Cost Flow Reporting Job Cost Data Under- or Interim Balances Year-end Balance Overapplied Manufacturing ACCOUNTING Overhead Assigning Costs to Finished Goods Assigning Costs to Costs of Goods Sold Summary The Navigator Job Order Cost System Process Cost System Chapte J OB ORDER COSTING The Navigator Scan Study Objectives Read Preview Read Chapter Review Work Demonstration Problem Answer True-False Statements Answer Multiple-Choice Questions Match Terms and Definitions Solve Exercises
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15-2 Kimmel Accounting: Tools for Business Decision Making _____________________________________________________________________________ CHAPTER REVIEW Cost Accounting Systems 1. (S.O. 1) Cost accounting involves the measuring, recording, and reporting of product costs. From the data accumulated, both the total cost and unit cost of each product is determined . 2. A cost accounting system consists of accounts for the various manufacturing costs. These accounts are fully integrated into the general ledger of a company. An important feature of a cost accounting system is the use of a perpetual inventory system. Such a system provides information immediately on the cost of a product. The two basic types of cost accounting systems are (a) a job order cost system and (b) a process cost system. 3. Under a job order cost system, costs are assigned to each job or to each batch of goods. 4. A process cost system is used when a large volume of similar products are manufactured. Process costing accumulates product-related costs for a period of time instead of assigning costs to specific products or job orders. Job Order Cost Flow 5. (S.O. 2) The flow of costs in job order cost accounting parallels the physical flow of the materials as they are converted into finished goods. There are two major steps in the flow of costs: (a) accumulating the manufacturing costs incurred and (b) assigning the accumulated costs to the work done. 6.
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ch15 - Chapte 15 The Navigator Scan Study Objectives Read...

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