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ACIS2116_Chap3_Slides_with_blanks

ACIS2116_Chap3_Slides_with_blanks - Systems Design...

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Chapter Three Systems Design: Job-Order Costing
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Types of Product Costing Systems Process Costing Job-order Costing What kind of companies use process costing?
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Types of Product Costing Systems Process Costing Job-order Costing A company that produces many units of a single product. One unit of product is indistinguishable from other units of product. Each unit of product is assigned the same average cost per unit.
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Types of Product Costing Systems Process Costing Job-order Costing A company produces ______units of a _______ A company produces ______units of a _______ product. product. One unit of product is _______________from One unit of product is _______________from other units of product. other units of product. Each unit of product is assigned the ______average Each unit of product is assigned the ______average cost per unit. cost per unit. Example companies: Example companies: 1. Weyerhaeuser (paper manufacturing) 1. Weyerhaeuser (paper manufacturing) 2. Reynolds Aluminum (refining aluminum ingots) 2. Reynolds Aluminum (refining aluminum ingots) 3. Coca-Cola (mixing and bottling beverages) 3. Coca-Cola (mixing and bottling beverages)
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Types of Product Costing Systems Process Costing Job-order Costing What kind of companies use job-order costing?
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Types of Product Costing Systems Process Costing Job-order Costing Many different products are produced each period. Products are manufactured to order. Cost must be traced or allocated to each job. Cost records must be maintained for each job.
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Types of Product Costing Systems Process Costing Job-order Costing Many _______products are produced each period. Many _______products are produced each period. Products are manufactured to ______. Products are manufactured to ______. Cost must be traced or allocated to each____. Cost must be traced or allocated to each____. Cost records must be maintained for each ____. Cost records must be maintained for each ____. Example companies: Example companies: 1. Boeing (aircraft manufacturing) 1. Boeing (aircraft manufacturing) 2. Bechtel International (large scale construction) 2. Bechtel International (large scale construction) 3. Walt Disney Studios (movie production) 3. Walt Disney Studios (movie production)
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Comparing Process and Job-Order Costing Number of jobs worked Many Single Product Cost accumulated by Job Department Average cost computed by Job Department
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Quick Check Which of the following companies would be likely to use job-order costing rather than process costing? a. Scott Paper Company for Kleenex. b. Architects. c. Heinz for ketchup. d. Caterer for a wedding reception. e. Builder of commercial fishing vessels.
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Manufacturing Overhead Job No. 1 Job No. 2 Job No. 3 Charge Charge direct direct material and material and direct labor direct labor costs to costs to each job as each job as work is work is performed.
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