Chapter 5 Supplementary notes

Chapter 5 Supplementary notes - Job Costing 1 Plan for the...

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Unformatted text preview: Job Costing 1 Plan for the day 1. Why and when should we use job costing? 2. Flow of production in job costing 3. Predetermined MOH rate 4. Computing the cost of a job 5. Disposing of overallocated and underallocated MOH 6. Journal entries Job Costing Unique, custom products or small batches 787 Dreamliner customized for Uniteds routes to New Zealand and Nigeria. Total costs are accumulated by job Need to have a WIP account by job. Examples Hospitals Custom home builders Advertising agencies 3 Flow of Inventory Through a Manufacturing System Raw Materials Storeroom Work in process Production Department Finishe d Goods Ready for sale Cost of Goods Sold Sold 4 Practice Example Job 100 101 102 103 DM $200 $1,200 $800 $500 DL 500 600 450 200 MOH 250 300 225 100 Total in the WIP account $950 $2,100 $1,475 $800 5 No beginning inventory of Direct Materials Job #100 is finished and will be transferred to finished goods inventory Purchasing Process for materials Purchasing determines ordering needs (500 pounds) Shipping and receiving prepare a blind receiving report Accounting matches invoice from supplier ($1,250) with purchase order Purchasing issues purchase order Accounting pays the invoice 6 Materials Requisition Materials Requisition Number: #7568 Date: 12/2 Job: 101 Part Number Description Quantity Unit Cost Amount HRM50812 Aluminum 100 Lbs $2.50 $250 Total $250 7 Direct Materials Material Purchases 1,250 Direct Material 1,250 Direct Material 250 Accounting for purchasing and requisitioning Materials Direct Material 375 Work in Process-102 Work in Process-101 8 Direct Material 500 Work in Process-103 Raw Materials Record Updated for Materials Received and Used Raw Materials Record Item No. Aluminum Description: XXX Received Used Balance Date Units Cost Total Requisitio n Number Units Cost Total Units Cost Total 11-25 500 $2.5 $1,250 500 $2.5 $1,250 11-30 #7235 100 $2.5 $250 400 $2.5 $1,000 12-1 #7238 150 $2.5 $3750 250 $2.5 $625 12-2 #7568 200 $2.5 $500 50 $2.5 $125 9 Job Cost Record/sheet Job Cost Record Job Number: 101 Customer: For stock Job Description: 50 units of X4 Elliptical Cross-Trainers Date Started: Dec. 2 Date Completed: _________ Manufacturing Cost Information: Cost Summary Direct Materials $1,200+ 250 Direct Labor $ Manufacturing Overhead $ Total Job Cost $ Number of Units 50 units Cost per Unit $ Shipping Information: Date Quantity Shipped Units Remaining Cost Balance 10 Work in Process Inventory JOB 101- Direct Materials Direct Labor MOH Total Job Cost Balance Sheet Life Fitness November 30 Assets: Liabilities and Owners Equity: Cash Accounts Payable Accounts Receivable Wages and Salaries Payable Raw Materials Inventory Other Liabilities Work in Process Inventory Finished Goods Inventory Common Stock...
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This note was uploaded on 11/09/2011 for the course ACCT 3337 taught by Professor Staff during the Fall '08 term at University of Houston.

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Chapter 5 Supplementary notes - Job Costing 1 Plan for the...

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