ACIS 2116 Powerpoints for Remainder of Chapter 5-1

ACIS 2116 Powerpoints for Remainder of Chapter 5-1 - Job...

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ACIS 2116 Remainder of Chapter Five (Includes Appendix) Job Costing, Process Costing and Operations Costing
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Why Use an Allocation Base? It is impossible or difficult to trace overhead costs to particular jobs. MOH consists of many different items. Many types of manufacturing overhead costs are fixed.
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The predetermined overhead rate (POHR) used to apply overhead to jobs is determined before the period begins. Manufacturing Overhead Application Estimated total manufacturing overhead cost for the coming period Estimated total units in the allocation base for the coming period POHR =
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This is confusing…Why can’t we just record actual MOH for each job?
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Using a predetermined rate makes it possible to estimate total job costs sooner. Actual overhead for the period is not known until the end of the period. The Need for a POHR $
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Based on estimates , and determined before the period begins. Application of Manufacturing Overhead Overhead applied = POHR × Actual activity
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For each direct labor hour worked on a particular job, $4.00 of factory overhead will be applied to that job. Overhead Application Rate POHR = $4.00 per DLH $640,000 160,000 direct labor hours (DLH) POHR = Estimated total manufacturing overhead cost for the coming period Estimated total units in the allocation base for the coming period POHR =
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Job Cost Accounting CrateCo Job Cost Sheet Job Number A - 143 Date Initiated 3-4-05 Date Completed 3-5-05 Department B3 Units Completed 2 Item Wooden cargo crate Direct Materials Direct Labor Manufacturing Overhead Req. No. Amount Ticket Hours Amount Hours Rate Amount X7-6890 116 $ 36 8 88 $ 8 4 $ 32 $ Cost Summary Units Shipped Direct Materials 116 $ Date Number Balance Direct Labor 88 $ Manufacturing Overhead 32 $ Total Cost Unit Product Cost
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Job Costing Document Flow Summary Manufacturing Overhead Account Other Actual OH Charges Job Cost Sheets Applied Overhead Materials Requisition Employee Time Ticket Indirect Material Indirect Labor
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Job Cost Accounting CrateCo Job Cost Sheet Job Number A - 143 Date Initiated 3-4-05 Date Completed 3-5-05 Department B3 Units Completed 2 Item Wooden cargo crate Direct Materials Direct Labor Manufacturing Overhead Req. No. Amount Ticket Hours Amount Hours Rate Amount X7-6890 116 $ 36 8 88 $ 8 4 $ 32 $ Cost Summary Units Shipped Direct Materials 116 $ Date Number Balance Direct Labor 88 $ Manufacturing Overhead 32 $ Total Cost 236 $ Unit Product Cost 118 $
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Job WR53 at NW Fab, Inc. required $200 of direct materials and 10 direct labor hours at $15 per hour. Estimated total overhead for the year was $760,000 and estimated direct labor hours were 20,000. What would be recorded as the cost of job WR53? a. $200.
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ACIS 2116 Powerpoints for Remainder of Chapter 5-1 - Job...

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