Chapt 4 notes - Job Costing Services and Goods Chapter 4...

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Job Costing Services and Goods – Chapter 4 January 20, 2012 Cost Pool A grouping of related individual cost items Cost-Allocation Base A measure of an input that is common to all jobs Provides a reasonable way to assign indirect costs to jobs Cost-Application Base When the cost object is a specific client, product or job Cost-Allocation Rate = indirect cost pool / total direct input Costing Systems - Job-Costing o Accounting method for input costs of distinct outputs called Jobs o Each job may be different from the next o Costs are traced or allocated to the specific jobs o Cost records must be maintained for each job - Process-Costing o Accounting method for mass production of identical or similar products o Many units of a single, homogeneous product flow evenly through a continuous production process. o Each unit of product is indistinguishable from any other o Each unit of product is assigned the same average cost The Job Costing Process - Identify the job - the cost object - Identify the direct inputs of the cost object (job) - Select the cost-allocation base(s) to use for allocating indirect costs to the cost object
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Chapt 4 notes - Job Costing Services and Goods Chapter 4...

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