UNIT 17 study guide - o No beginning inventories WIP o Add chemicals jugs caps labels o Pay employees o Add up utilities factory insurance

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UNIT 17 1) Cost- - is simply another word for “financial measurment” - monetary sacrifice the company has made or will be making. Expense - is a cost which is written off against revenue on an income statement •Many costs eventually become expenses •Many costs are “now”; but their expenses come “later” •Therefore, line managers, supervisors, and department heads are usually more interested in COSTS than they are expenses. 1) Product costs a. Purchases b. Cost of goods manufactured b.i. All costs required to make the product b.ii. Direct Materials, direct labor, manufacturing overhead c. Become expense ONLY when the product is SOLD d. “inventoriable costs” Period costs a. become expenses in the PERIOD in which they are USED 3) - Job order costing o Unique products Auto repair jobs Hospital stays - Process costing o Identical products Basketballs, pencils, lightbulbs o Dedicated factory o Accumulate the mfg costs for the period o Divide by the production output of that period
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Unformatted text preview: o No beginning inventories WIP o Add chemicals, jugs, caps, labels o Pay employees o Add up utilities, factory insurance, depreciation, maintenance on factory o No Ending WIP inventories-Hybrid costing o Company that would otherwise use PROCESS costing makes BATCHES of different products Kellogs cereal 4) -Process costing o 1. Record the materials that go into production. o 2. Record the labor that goes into production. o 3. Record the overhead costs that go into production. o 4. Total the costs that go into production. o 5. Divide by the number of products that come out of production 5)-Job order costing o Direct materials (for this job) o ADD Direct labor (for this job) o ADD Mfg Overhead (to this job) o Equals Total Manufacturing Cost (for this job) o COST OF JOB MANUFACTURED 6)-Hybrid costing o Activity based costing (ABC) o Process costing after each batch...
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This note was uploaded on 01/11/2012 for the course ACTG 241 taught by Professor Staff during the Fall '11 term at James Madison University.

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UNIT 17 study guide - o No beginning inventories WIP o Add chemicals jugs caps labels o Pay employees o Add up utilities factory insurance

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