Lecture_3 Chapter3

Lecture_3 Chapter3 - Job-Order Costing Lecture#3(Chapter 3...

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Unformatted text preview: Job-Order Costing Lecture #3 (Chapter 3) Dr. Minlei Ye 1 Learning Objectives • Calculate predetermined overhead rates • Apply overhead cost to WIP • Record job-order cost flow journal entries • Compute under- or over-applied 2 Manufacturing Overhead Job No. 1 Job No. 2 Job No. 3 Charge direct material and direct labour costs to each job as work is performed. Job-Order Costing – DM&DL Direct Materials Direct Labour 3 Manufacturing Overhead Indirect Materials Indirect Labour Factory Utilities Rent on Manufacturing Facilities Depreciation on Manufacturing Assets Any other MOH Maintenance Manufacturing Overhead (MOH) 4 Manufacturing Overhead are allocated to all jobs rather than directly traced to each job. Job-Order Costing -- MOH Direct Materials Direct Labour Job No. 1 Job No. 2 Job No. 3 Manufacturing Overhead 5 The predetermined overhead rate ( POHR ) used to apply overhead to jobs is determined before the period begins. Manufacturing Overhead Application Estimated total manufacturing overhead cost for the coming period Estimated total units in the allocation base for the coming period POHR = Ideally, the allocation base is a cost driver that causes overhead....
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Lecture_3 Chapter3 - Job-Order Costing Lecture#3(Chapter 3...

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