Chapter 4 - ACC 200 Spring 2011 Chapter 4 Job Costing,...

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Click to edit Master subtitle style ACC 200 – Spring 2011 Chapter 4 Job Costing, Process Costing and Operations Costing Christopher T. McKittrick CPA, MBA, CFE College of Management
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Objectives – Ch 4 - Job Costing, Process Costing and Operations Costing ¢ Describe, comprehend, and contrast job costing, operations costing and process costing ¢ Analyze the issues related to the measurement of direct materials, direct labor and overhead costs in job costing ¢ Describe the necessity for allocating indirect product costs ¢ Analyze the role of cost pools and cost drivers in overhead application ¢ Compute a predetermined overhead rate (POHR) ¢ Apply overhead to work in process (WIP) ¢ Calculate the cost of a product using job costing ¢ Compute the amount of over or under applied overhead ¢ Dealing with over or under applied overhead ¢ Describe the use of equivalent units in process costing ¢ Calculate the equivalent units of production using the first-in- first-out (FIFO) method ¢ Calculate the cost of ending WIP and the cost of goods manufactured using process costing
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Managerial Decisions ¢ How to determine the cost of the products or services being produced and sold? ¢ How is the cost of the product used? l Determine the selling price l Determine whether to sell a product l Determine which product or service to sell l Buy or make choice for a component or product l Sharing profits with other companies (or individuals)
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Product Costing Systems ¢ Job Costing l Used for customized product or service l Track and assign costs to individual jobs ¢ Process Costing l A homogeneous product being produced on a continuous basis l Track and assign costs to processes and then assign to each product that passes through ¢ Operations Costing l A hybrid of job and process costing l Used by manufacturers who make products in batches
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Job Costing Companies that manufacture customized products or provide customized services to clients use a costing system called , which accumulates, tracks, and assigns costs for each job. EXAMPL ES Builder of custom homes A CPA firm A Hospital
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Process Costing Companies that produce a homogeneous product on a continuous basis use process costing to accumulate, track, and assign costs to products. EXAMPL ES Oil Refineries Paint Manufacture rs Beverage Manufacture rs
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Operations Costing Operations costing is a hybrid of job and process costing, for companies that make large numbers of products that are standardized within a batch. EXAMPL ES Clothing Manufacture rs Automobile Manufacture rs Footwear Manufacture rs
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Summary of Job Costing, Process Costing, and Operations Costing
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99 Costing Products ¢ What costs are included in the cost of a product? l DM, DL and Manufacturing Overhead ¢ How do you determine how much overhead should be included in the cost of a product?
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This note was uploaded on 03/10/2011 for the course ACC 200 taught by Professor Buckless during the Spring '08 term at N.C. State.

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Chapter 4 - ACC 200 Spring 2011 Chapter 4 Job Costing,...

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