Chapter 05 - Chapter5 JobCosting,Process...

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1 Chapter 5 Job Costing, Process  Costing, and Operations  Costing
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2 Introduction How do managerial accountants  determine the cost of the products or  services being produced and sold by a  company? Too high a price may reduce sales and  competitiveness Too low a price may result in  unsatisfactory profits
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3 Introduction How is the cost of the product used? Determining the optimal selling price Deciding whether to buy or make a  component
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4 Product Costing Systems Job Costing Process Costing Operations Costing
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5 Product Costing Systems Job Costing Customized Production or Service Accumulates, tracks, and assigns costs for each job Examples include o Homes o Furniture o Print Orders o Tax Returns o Patients
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6 Product Costing Systems Process Costing A homogeneous product produced on a continuous  basis Examples include o Oil refineries o Breweries o Paint and Paper Manufacturers
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7 Product Costing Systems Operations Costing A hybrid of job and process costing Examples include o Automobiles o Clothing
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8 Basic Job Costing Job Cost Report Job101 Charles’ Custom Furniture Job Number: 101 Date Started: March 6 Description:  TV Cabinet Customer:  Robyn Gray Date Finished:  March 19 Direct Materials Direct Labor Manufacturing Overhead Type Cost Employee Hrs. Amount Hours Rate Amount   Oak  $ 875  Staley  12.6  $255.15 22.4 $ 12.50 $ 280.00 Maple    600      Chen        4.5        91.13 Particle-        Board      78 Kent        5.3   107.33  Glass    330               $1,883       22.4  $453.61    22.4 $280.00
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Basic Job Costing Cost Sheet for Job 101 Summary
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Chapter 05 - Chapter5 JobCosting,Process...

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