Chapter 4 - Full Student Version

Chapter 4 - Full Student Version - 4-1MANAGERIAL...

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Unformatted text preview: 4-1MANAGERIAL ACCOUNTINGRSM222Systems Design:Process CostingChapter 44-2Job Costing vs. Process CostingJob Costing vs. Process CostingProcess Costing:Process Costing:Job Costing: Job Costing: 4-3Comparing Job-Order and Process CostingFinishedGoodsFinishedGoodsCost of GoodsSoldCost of GoodsSoldWork inProcessDirect MaterialsDirect MaterialsDirect LabourDirect LabourManufacturing Overhead Manufacturing Overhead LO 14-4Comparing Job-Order and Process CostingFinishedGoodsFinishedGoodsCost of GoodsSoldCost of GoodsSoldDirect LabourDirect LabourManufacturing Overhead Manufacturing Overhead JobsJobsJobsJobsCosts are traced andapplied to individualjobs in a job-ordercost system.Costs are traced andapplied to individualjobs in a job-ordercost system.Direct MaterialsDirect MaterialsLO 14-5Comparing Job-Order and Process CostingFinishedGoodsFinishedGoodsCost of GoodsSoldCost of GoodsSoldDirect LabourDirect LabourManufacturing Overhead Manufacturing Overhead ProcessingDepartmentProcessingDepartmentCosts are traced and applied to departments in a process cost system.Costs are traced and applied to departments in a process cost system.Direct MaterialsDirect MaterialsLO 14-6Processing DepartmentsAny unit in an organization where materials, labour, or overhead are added to the product.The activities performed in a processingThe activities performed in a processingdepartment are department are performed uniformlyperformed uniformlyon allon allunits of production. Furthermore, the output ofunits of production. Furthermore, the output ofa processing department must be a processing department must be homogeneoushomogeneous. . Products in a process costing environment Products in a process costing environment typically flow in a sequence from one departmenttypically flow in a sequence from one departmentto another.to another.LO 14-7T-Account and Journal Entry Views of Cost FlowsFor purposes of this example, For purposes of this example, assume there are two assume there are two processing departments – processing departments – Departments A and B.Departments A and B.We will use T-accounts and We will use T-accounts and journal entries.journal entries.LO 14-8Raw MaterialsProcess Cost Flows: The Flow of Raw Materials(in T-account form)Work in ProcessDepartment BWork in ProcessDepartment A•DirectMaterials•DirectMaterials•DirectMaterialsLO 14-9Process Cost Flows: The Flow of Labour Costs (in T-account form)Work in ProcessDepartment BWork in ProcessDepartment ASalaries and Wages Payable•DirectMaterials•DirectMaterials•DirectLabour•DirectLabour•Direct LabourLO 14-10Process Cost Flows: The Flow of Manufacturing Overhead Costs (in T-account form)Work in ProcessDepartment BWork in ProcessDepartment AManufacturing Overhead•OverheadApplied to Work inProcess•AppliedOverhead•AppliedOverhead•DirectLabour•DirectMaterials•Direct Labour•DirectMaterials•Actual OverheadLO 14-11Process Cost Flows: Transfers from WIP-Dept. A to WIP-Dept. B (in T-account form)...
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This note was uploaded on 04/03/2012 for the course RSM 222 taught by Professor D.cianflone during the Spring '10 term at University of Toronto.

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Chapter 4 - Full Student Version - 4-1MANAGERIAL...

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