031210_UGBA+102B_Discussion_Section_07

031210_UGBA+102B_Discussion_Section_07 - UGBA 102B: Section...

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Unformatted text preview: UGBA 102B: Section 7 Process Costing Process Costing Review Process Costing Job-order Costing v Many different products are produced each period. Many different products are produced each period. v Products are manufactured to order. Products are manufactured to order. v The unique nature of each order requires tracing or The unique nature of each order requires tracing or allocating costs to each job, and maintaining cost allocating costs to each job, and maintaining cost records for each job. records for each job. Types of Product Costing Systems Process Costing Types of Product Costing Systems Process Costing Job-order Costing v A company produces many units of a single A company produces many units of a single product. product. v One unit of product is indistinguishable from One unit of product is indistinguishable from other units of product. other units of product. v The identical nature of each unit of product The identical nature of each unit of product enables enables assigning the same average cost per unit. assigning the same average cost per unit. Process Costing Process Costing Job-order Costing v A company produces many units of a single A company produces many units of a single product. product. v One unit of product is indistinguishable from One unit of product is indistinguishable from other units of product. other units of product. v The identical nature of each unit of product The identical nature of each unit of product enables enables assigning the same average cost per unit. assigning the same average 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 3. Coca-Cola (mixing and bottling beverages) Cola (mixing and bottling beverages) Types of Product Costing Systems Process Costing Today, we will focus on Process Costing Comparing Job-Order and Process Costing Finished Goods Cost of Goods Sold Work in Process Direct Materials Direct Labor Manufacturing Overhead Process Costing Finished Goods Cost of Goods Sold Direct Labor Manufacturing Overhead Jobs Jobs Costs are traced and applied to individual jobs in a job-order cost system. Direct Materials Process Costing Comparing Job-Order and Process Costing Finished Goods Cost of Goods Sold Direct Labor Manufacturing Overhead Processing Department Costs are traced and applied to departments in a process cost system. Direct Materials Process Costing Comparing Job-Order and Process Costing Process Costing Producing Departments Producing Departments are directly responsible for creating and delivering the products or services sold to customers....
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031210_UGBA+102B_Discussion_Section_07 - UGBA 102B: Section...

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