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Chapter 3 - Chapter 3 Systems Design Job-Order Costing...

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Chapter 3 Systems Design: Job-Order Costing Suggested Homework: E3-1 thru E3-9, E3-12 thru E3-14
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Types of Product Costing Systems Process Costing Job-order Costing A company produces many units of a single product . One unit of product is indistinguishable from other units of product. The identical nature of each unit of product enables assigning the same average cost per unit .
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Types of Product Costing Systems Many different products are produced each period. Products are manufactured to order . The unique nature of each order requires tracing or allocating costs to each job, and maintaining cost records for each job . Process Costing Job-order Costing
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Comparing Process and Job-Order Costing Job-Order Process 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 direct Charge direct material and direct material and direct labor costs to each labor costs to each job as work is job as work is performed. performed. Job-Order Costing – An Overview Direct Materials Direct Labor
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Manufacturing Manufacturing Overhead, Overhead, including including indirect indirect materials materials and and indirect labor indirect labor , , are allocated are allocated to all jobs to all jobs rather than rather than directly traced directly traced to each job. to each job. Direct Materials Direct Labor Job No. 1 Job No. 2 Job No. 3 Manufacturing Overhead Job-Order Costing – An Overview
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PearCo Job Cost Sheet Job Number A - 143 Date Initiated 3-4-08 Date Completed Department B3 Units Completed Item Wooden cargo crate Direct Materials Direct Labor Manufacturing Overhead Req. No. Amount Ticket Hours Amount Hours Rate Amount Cost Summary Units Shipped Direct Materials Date Number Balance Direct Labor Manufacturing Overhead Total Cost Unit Product Cost The Job Cost Sheet
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Measuring Direct Materials Cost PearCo Materials Requisition Form Requisition No. X7 - 6890 Date 3-4-08 Job No. A - 143 Department B3 Description Quantity Unit Cost Total Cost 2 x 4, 12 feet 12 3.00 $ 36.00 $ 1 x 6, 12 feet 20 4.00 80.00 116.00 $ Authorized Signature Will E. Delite
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PearCo Job Cost Sheet Job Number A - 143 Date Initiated 3-4-08 Date Completed Department B3 Units Completed Item Wooden cargo crate Direct Materials Direct Labor Manufacturing Overhead Req. No. Amount Ticket Hours Amount Hours Rate Amount X7-6890 116 $ Cost Summary Units Shipped Direct Materials 116 $ Date Number Balance Direct Labor Manufacturing Overhead Total Cost Unit Product Cost Measuring Direct Materials Cost
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Measuring Direct Labor Costs PearCo Employee Time Ticket Time Ticket No. 36 Date 3/5/2008 Employee I. M. Skilled Station 42 Starting Ending Hours Hourly Time Time Completed Rate Amount Job No.
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