Chapter 16 - Job Costing (2)

Chapter 16 - Job Costing (2) - Chapter 16 Job Costing...

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Copyright © 2009 School of Accountancy, 1 Chapter 16 Job Costing Please pick up handout
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Copyright © 2009 School of Accountancy, 2 Developing a Costing System When developing a product-costing system, there are three choices that must be made: Cost accumulation method (i.e., job or process costing) Cost measurement method (i.e., actual, normal, or standard costing) Overhead assignment method (i.e., volume-based or activity- based) Each product-costing system will reflect these three choices For example, an organization’s cost system may be characterized by: job costing with normalized costs, and activity-based costing used to allocate indirect costs
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Copyright © 2009 School of Accountancy, 3 Types of Costing Systems Process Costing Job-order Costing Used for products or services that are very homogenous. Mass produced in continuous production process. Each unit consumes similar amounts of resources (DM, DL, OH). Examples?
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Copyright © 2009 School of Accountancy, 4 Types of Costing Systems Used Process Costing Job-order Costing Unique products or services. Customized rather than mass produced. Some jobs/customers are likely to consume more resources (DM, DL, OH) than others. Examples?
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Copyright © 2009 School of Accountancy, 5 Let’s work a problem.
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Copyright © 2009 School of Accountancy, 6 Overhead application is the process of allocating overhead costs to individual jobs There are three approaches to allocating overhead: actual, normal, and standard costing (Chapter 9) Under the actual application method, overhead costs are tracked for each job and are transferred to WIP and Finished Goods Inventory in the exact amounts incurred Under the normal application method, overhead costs are applied to various jobs using a single predetermined factory overhead rate Cost Flows – Factory Overhead
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7 Developing a Costing System--Summary Costing System Direct Materials Direct Labor Factory Overhead Actual Costing Actual Cost Actual Cost Actual Cost Normal Costing Actual Cost Actual Cost Applied Overhead Cost
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This note was uploaded on 01/07/2012 for the course ACC 241 taught by Professor Karengeiger during the Fall '08 term at ASU.

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Chapter 16 - Job Costing (2) - Chapter 16 Job Costing...

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