Download
chapter 15 n.
Skip this Video
Loading SlideShow in 5 Seconds..
CHAPTER 15 PowerPoint Presentation

CHAPTER 15

117 Vues Download Presentation
Télécharger la présentation

CHAPTER 15

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

  1. CHAPTER 15 Job Order Costing & Analysis

  2. Cost Accounting Systems determine the costs associated with products (or services). • ________ Cost System (this chapter) • used for unique or custom ordered products • ________Cost System (next chapter) • is used for mass produced items

  3. Job-Order Costing • ____or job lots are used as the means of collecting costs. • Used for production of large, unique, or high-cost items. • Built to order rather than mass produced. • Many costs can be directly traced to each job • Jobs are easily distinguished from one another • Examples: professional services, printing, construction, custom furniture, jumbo jet airplanes, hospitals, law firms…

  4. Events in Job Costing Receive order from customers Schedule the job Predict cost to complete job Negotiate a sales price and decide whether to pursue the job.

  5. Uses of Cost Information • We can use the job costs to help with the following types of activities. • pricing the job • controlling cost • budgeting

  6. Job Order Cost Flows • You must understand the ____of costs through the accounting system • Remember the elements of cost of products from the previous chapter • You can use T-Accounts and/or journal entries to understand the flow.

  7. Cost Flows in Job Costing FinishedGoods Cost of GoodsSold Direct Materials Indirect FactoryOverhead Goods in Process Allocate Indirect Direct Labor

  8. Factory (direct) Labor • This account is used to account for all wages paid to workers within the _______. • We debit Factory Labor as labor costs are incurred and recognized • What’s the credit? • We determine what portion of this is ______labor and which represents ______labor • Direct labor goes into ______________ • Why? • Indirect labor goes into ____________ • Why?

  9. Factory Overhead (OH) • We use the ________account for two reasons: • We debit it as the overhead items are incurred and recognized in the accounting system. • We credit it as we apply (______) overheadto individual jobs • WIP $X • OH $X

  10. Applying OH to Jobs • How do we know how much overhead to apply to the various jobs in process? • We determine an application base and a rate to use in applying the OH. • ? = ?_____________(POHR) ? • where the activity level is usually some measure of direct labor hours, direct labor cost or machine hours (i.e. the ________)

  11. Under or Over Applied Overhead • _____________ = OH rate * actual activity (POHR) for the period • At the end of the year, the OH account may have a debit or a credit balance • amount incurred during the year did not equal the amount applied to individual jobs • In other words, our estimates aren’t perfect! • We will close out this account at the end of the year to _____.

  12. Why allocate OH instead of using actual? • Reasons for using a predetermined OH rate • Overhead is not incurred _______ throughout the year • Actual overhead rate might _____ from month to month • Predetermined rates make estimating job costs ________ • Actual overhead is _______ until after it has been incurred (i.e. at the end of the year)

  13. Estimated total factory overhead costs Predetermined factory overhead rate = Estimated activity base Predetermined Factory Overhead Rates 1.Direct labor hours 2. Direct labor dollars 3. Machine hours 4. Direct materials 5. Other Activity base examples

  14. Estimated total factory overhead costs Estimated activity base $50,000 estimated factory overhead costs 10,000 estimated direct labor hours Predetermined Factory Overhead Rates Predetermined factory overhead rate = $5 per direct labor hour =

  15. Estimated total factory overhead costs Estimated activity base $50,000 estimated factory overhead costs 10,000 estimated direct labor hours Predetermined Factory Overhead Rates Predetermined factory overhead rate = $5 per direct labor hour = For each direct labor hour worked, factory overhead applied is $5. Direct Factory Labor Overhead Hours Applied Job 71 350 x $5 = $1,750 Job 72 500 x $5 = $2,500

  16. Recording Factory Overhead Factory Overhead $4,400 ACTUAL Based on actual costs incurred

  17. Recording Factory Overhead Factory Overhead $4,400 $4,250 ACTUAL Based on actual costs incurred APPLIED Based on estimated rate ($5 x 850 hrs) What account is charged (debited)? Is factory overhead overapplied or underapplied?

  18. Recording Factory Overhead Factory Overhead $4,400 $4,250 ACTUAL Based on actual costs incurred APPLIED Based on estimated rate ($5 x 850 hrs) Work in Process is charged (debited). $150 BALANCE Underapplied How would this balance be closed at year end?

  19. Recording Factory Overhead Factory Overhead $4,400 $4,250 ACTUAL Based on actual costs incurred APPLIED Based on estimated rate ($5 x 850 hrs) Work in Process is charged (debited). $150 BALANCE Underapplied An immaterial balance is closed to Cost of Goods Sold at year end.

  20. Job Cost Sheets • A __________ is prepared for each and every job undertaken. The job sheet is used to keep track of all the costs applied to that job • direct materials, direct labor, OH • When a job is complete, we • decrease ___inventory and • increase __inventory by the cost of the job that is done. • When jobs are sold, we transfer the costs to ____

  21. Purpose of Job Cost Information and Sheets • Job Cost sheets are maintained to aid in the following: • Tracking the cost of ____________ • Transferring costs from ___to __to ____ • Serving as a subsidiary ledger of information for WIP and FG. • Any time you make an entry to WIP, then you should also enter information on the related job cost tickets.

  22. Reporting of Cost Data • The balance sheet will contain the _____ _______of the various inventory accounts. • The income statement will show the COGM and the COGS as described in the previous chapter, with one exception. COGM = WIP, beg + (DM used + DL + actual OH) + overappliedoverhead (or – underapplied overhead)- WIP, end.

  23. Cost of Good Sold • ____________is still equal to: FG inventory, beg + COGM = Goods Available for Sale - FG inventory, end = Cost of Goods Sold

  24. Review the Flow of Costs • 1. Purchase raw materials • 2. Incur factory wages • 3. Incur overhead • 4. Raw materials used • 5. Factor labor is applied to jobs • 6. Overhead is applied to jobs • 7. Completed jobs are recognized • 8. Cost of goods sold is recognized.

  25. DirectMaterial DirectMaterial Indirect Material ActualOverheadCosts Summary of Cost Flows P3 Dr Cr Dr Cr Material Purchases Dr Cr

  26. DirectLabor Indirect Labor DirectLabor Overhead When Actual Applied factory factoryoverhead overhead ActualOverheadCosts OverheadApplied to Work inProcess / = an adjustment is needed. Summary of Cost Flows P4 DirectMaterial Incurred

  27. Cost ofGoodsMfd. Cost ofGoodsMfd. Cost ofGoodsSold Cost ofGoodsSold Summary of Cost Flows P4 DirectMaterialDirectLaborOverhead