tailieunhanh - Lecture Accounting principles (12th Edition): Chapter 20 - Weygandt, Kimmel, Kieso

Chapter 20 - Job order costing. In this chapter, the learning objectives are: Explain process operations and the way they differ from job order operations, define and compute equivalent units and explain their use in process cost accounting, define and prepare a process cost summary and describe its purposes. | Learning Objectives Describe cost systems and the flow of costs in a job order system. 1 Use a job cost sheet to assign costs to work in process. 2 Demonstrate how to determine and use the predetermined overhead rate. 3 Prepare entries for manufacturing and service jobs completed and sold. 4 Distinguish between under- and overapplied manufacturing overhead. 5 Job Order Costing 20 Cost Accounting involves Measuring, Recording, and Reporting product costs. Accounts are fully integrated into the general ledger. Perpetual inventory system provides immediate, up-to-date information on the cost of a product. Two basic types: (1) a process order cost system and (2) a job order cost system. LEARNING OBJECTIVE Describe cost systems and the flow of costs in a job order system. 1 LO 1 Used when a large volume of similar products are manufactured - (cereal, refining of petroleum, production of ice cream). Costs are accumulated for a time period – (week or month). Costs are assigned to departments or processes for a specified period of time. Process Cost System LO 1 Illustration 20-1 Process cost system Process Cost System LO 1 Costs are assigned to each job or batch. Important feature: Each job or batch has its own distinguishing characteristics. Objective is to compute the cost per job. Measures costs for each job completed – not for set time periods. LO 1 Job Order Cost System Illustration 20-2 shows the recording of costs in a job order cost system for Disney as it produced two different films. LO 1 Job Order Cost System Illustration 20-2 Job order cost system for Disney Jobs Won, Money Lost Many companies suffer from poor cost accounting. As result, they sometimes make products they should not be selling at all, or they buy product components that they could more profitably make themselves. Also, inaccurate cost data leads companies to misallocate capital and frustrates efforts by plant managers to improve efficiency. For example, consider the case of a diversified company | Learning Objectives Describe cost systems and the flow of costs in a job order system. 1 Use a job cost sheet to assign costs to work in process. 2 Demonstrate how to determine and use the predetermined overhead rate. 3 Prepare entries for manufacturing and service jobs completed and sold. 4 Distinguish between under- and overapplied manufacturing overhead. 5 Job Order Costing 20 Cost Accounting involves Measuring, Recording, and Reporting product costs. Accounts are fully integrated into the general ledger. Perpetual inventory system provides immediate, up-to-date information on the cost of a product. Two basic types: (1) a process order cost system and (2) a job order cost system. LEARNING OBJECTIVE Describe cost systems and the flow of costs in a job order system. 1 LO 1 Used when a large volume of similar products are manufactured - (cereal, refining of petroleum, production of ice cream). Costs are accumulated for a time period – (week or month). Costs are assigned to departments