tailieunhanh - Lecture Fundamental accounting principles (20/e): Chapter 19 - Wild, Shaw, Chiappetta

Chapter 19 - Job order cost accounting. After completing this chapter you should be able to: Describe important features of job order production, explain job cost sheets and how they are used in job order cost accounting, apply job order costing in pricing services, describe and record the flow of materials costs in job order cost accounting, describe and record the flow of labor costs in job order cost accounting. | Chapter 19 JOB ORDER COST ACCOUNTING Chapter 19: Job Order Cost Accounting Process Costing Job Costing 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. COST ACCOUNTING SYSTEMS Chapter 20 C 1 There are two basic types of cost accounting systems: job order cost accounting and process cost accounting. This chapter addresses job order cost accounting and process cost accounting is explained in the next chapter. Job order costing is typically used by manufacturers of custom products or providers of custom services. The jobs must be large enough in scope and value to justify the accounting effort to trace costs to the jobs. Job order production can apply to both manufacturing and service companies. Process Costing Job Costing Typical job order cost applications: Special-order printing Building construction Also used in service industry Hospitals Law firms Chapter 20 JOB ORDER PRODUCTION C 1 Here you see some examples where job order costing is used. Another example familiar to many of us is an automobile repair shop. When you take your car in for an inexpensive job like an oil change, you expect to be charged the cost of an oil change instead of an expensive engine repair. The shop’s accounting system must be able to handle multiple jobs with differing amounts of materials and labor costs that are incurred each day. Receive order from customer. Predict cost to complete job. Negotiate a sales price and decide whether to pursue the job. Schedule production of the job. EVENTS IN JOB ORDER COSTING C 1 The initial event in a job order system is receipt of a customer order. A less common case is to begin work on a job before the company has a signed contract. This is referred to as jobs produced on speculation. The sales price of the job may be a cost-plus, such as with a government contract, or it may be determined by market factors. The company may then decide whether the . | Chapter 19 JOB ORDER COST ACCOUNTING Chapter 19: Job Order Cost Accounting Process Costing Job Costing 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. COST ACCOUNTING SYSTEMS Chapter 20 C 1 There are two basic types of cost accounting systems: job order cost accounting and process cost accounting. This chapter addresses job order cost accounting and process cost accounting is explained in the next chapter. Job order costing is typically used by manufacturers of custom products or providers of custom services. The jobs must be large enough in scope and value to justify the accounting effort to trace costs to the jobs. Job order production can apply to both manufacturing and service companies. Process Costing Job Costing Typical job order cost applications: Special-order printing Building construction Also used in service industry Hospitals Law firms Chapter 20 JOB ORDER PRODUCTION C 1 .