MA_Chapter4 - ACTG 1P11 MA CHAPTER 4 JOB-ORDER COSTING...

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ACTG 1P11 – MA CHAPTER 4 JOB-ORDER COSTING SYSTEMS 1. Job – order costing system : a. Manufactures product to unique customer specification. b. A job is an individual product or batch for which a company needs cost information. c. Costs are accumulated by job, i.e., by individual product or batch, so the costs can be matched against the revenues generated d. Examples include: (1) Construction companies (2) Shipbuilders (3) Printing companies (4) Accounting firms 2. Process costing systems: a. Produces large quantities of identical items. b. Items pass through uniform and continuous production operations. c. Costs are accumulated by process (department), and unit costs are derived by dividing total costs by the total units produced. d. Examples include: (1) Paint and plastic manufacturers (2) Chemical producers (3) Metal producers 2. Job costs and financial statement accounts. 1. Work in Process Inventory represents the costs of all incomplete jobs. 2. Finished Goods Inventory represents the costs of all completed jobs. 3. Cost of Goods Sold represents the costs of all jobs sold during the period.
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3. Overview of Job Costs and Financial Statement Accounts - In a job-order costing systems, product costs (direct materials, direct labor, and overhead) flow into work in process while a job is being worked on. When the job is completed, the costs flow out of work in process, into finished goods. And, when the job is sold, the costs flow out of finished goods into cost of goods sold. Work In Process
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This note was uploaded on 11/04/2011 for the course ACTG 1P11 taught by Professor Nchasse during the Fall '11 term at Brock University.

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MA_Chapter4 - ACTG 1P11 MA CHAPTER 4 JOB-ORDER COSTING...

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