tailieunhanh - Lecture Managerial accounting (15/e): Chapter 4 - Garrison, Noreen, Brewer

Chapter 4 - Process costing. Managers need to assign costs to products to facilitate external financial reporting and internal decision making. This chapter illustrates an absorption costing approach to calculating product costs known as process costing. | Process Costing Chapter 4 Similarities Between Job-Order and Process Costing Both systems assign material, labor, and overhead costs to products and they provide a mechanism for computing unit product costs. Both systems use the same manufacturing accounts, including Manufacturing Overhead, Raw Materials, Work in Process, and Finished Goods. The flow of costs through the manufacturing accounts is basically the same in both systems. Differences Between Job-Order and Process Costing Process costing: Is used when a single product is produced on a continuing basis or for a long period of time. Job-order costing is used when many different jobs having different production requirements are worked on each period. Systems accumulate costs by department. Job-order costing systems accumulated costs by individual jobs. Systems compute unit costs by department. Job-order costing systems compute unit costs by job on the job cost sheet. Processing Departments Any unit in an organization where . | Process Costing Chapter 4 Similarities Between Job-Order and Process Costing Both systems assign material, labor, and overhead costs to products and they provide a mechanism for computing unit product costs. Both systems use the same manufacturing accounts, including Manufacturing Overhead, Raw Materials, Work in Process, and Finished Goods. The flow of costs through the manufacturing accounts is basically the same in both systems. Differences Between Job-Order and Process Costing Process costing: Is used when a single product is produced on a continuing basis or for a long period of time. Job-order costing is used when many different jobs having different production requirements are worked on each period. Systems accumulate costs by department. Job-order costing systems accumulated costs by individual jobs. Systems compute unit costs by department. Job-order costing systems compute unit costs by job on the job cost sheet. Processing Departments Any unit in an organization where materials, labor, or overhead are added to the product. The activities performed in a processing department are performed uniformly on all units of production. Furthermore, the output of a processing department must be homogeneous. Products in a process costing environment typically flow in a sequence from one department to another. The Flow of Materials, Labor, and Overhead Costs Finished Goods Cost of Goods Sold Work in Process Direct Materials Direct Labor Manufacturing Overhead The Flow of Costs in a Job-Order Costing System Finished Goods Cost of Goods Sold Direct Labor Manufacturing Overhead Jobs Costs are traced and applied to individual jobs in a job-order cost system. Direct Materials The Flow of Costs in a Processing Costing System Finished Goods Cost of Goods Sold Direct Labor Manufacturing Overhead Processing Department Costs are traced and applied to departments in a process cost system. Direct Materials T-Account and Journal Entry Views of Process Cost Flows For purposes .