管理會計學英文版課件：Chap08 Job-Order Costing

1、Job-Order CostingChapter 8Learning Objective 1Distinguish between process costing and job-order costing, and identify companies that would use each costing method.2Types of Product Costing SystemsProcessCostingJob-orderCosting A company produces many units of a single product. One unit of product is

2、 indistinguishable from other units of product. The identical nature of each unit of product enables assigning the same average cost per unit.3Types of Product Costing SystemsProcessCostingJob-orderCosting A company produces many units of a single product. One unit of product is indistinguishable fr

3、om other units of product. The identical nature of each unit of product enables assigning the same average cost per unit.Example companies:1. Asia Pulp & Paper (paper manufacturing)2. Kang-shi-fu (Instant Noodle Producer)3. Coca-Cola (mixing and bottling beverages)4Types of Product Costing SystemsPr

4、ocessCostingJob-orderCosting Many different products are produced each period. Products are manufactured to order. The unique nature of each order requires tracing or allocating costs to each job, and maintaining cost records for each job.5Types of Product Costing SystemsProcessCostingJob-orderCosti

5、ng Many different products are produced each period. Products are manufactured to order. The unique nature of each order requires tracing or allocating costs to each job, and maintaining cost records for each job.Example companies:1. Commercial Aircraft Corporation of China (aircraft manufacturer)2.

6、 Tata Consultancy Services (Information Technology)3. Hong Kong Aircraft Engineering (aircraft maintenance)6Comparing Process and Job-Order Costing7Quick Check Which of the following companies would be likely to use job-order costing rather than process costing?a. Scott Paper Company for Kleenex.b.

7、Architects.c. Heinz for ketchup.d. Caterer for a wedding reception.e. Builder of commercial fishing vessels.8Quick Check Which of the following companies would be likely to use job-order costing rather than process costing?a. Scott Paper Company for Kleenex.b. Architects.c. Heinz for ketchup.d. Cate

8、rer for a wedding reception.e. Builder of commercial fishing vessels.9Learning Objective 2Identify the documents used in a job-order costing system.10Manufacturing OverheadJob No. 1Job No. 2Job No. 3Charge direct material and direct labor costs to each job as work is performed.Job-Order Costing An O

9、verviewDirect MaterialsDirect Labor11Manufacturing Overhead, including indirect materials and indirect labor, are allocated to all jobs rather than directly traced to each job.Indirect Manufacturing CostsDirect MaterialsDirect LaborJob No. 1Job No. 2Job No. 3Manufacturing Overhead12PearCo Job Cost S

10、heetJob Number A - 143Date Initiated 3-4-09Date CompletedDepartment B3Units CompletedItem Wooden cargo crateDirect MaterialsDirect LaborManufacturing OverheadReq. No.AmountTicketHoursAmountHoursRateAmountCost SummaryUnits ShippedDirect MaterialsDateNumberBalanceDirect LaborManufacturing OverheadTota

11、l CostUnit Product CostThe Job Cost Sheet13Measuring Direct Materials CostWill E. Delite14Measuring Direct Materials Cost15Measuring Direct Labor Costs16Job-Order Cost Accounting17Learning Objective 3Compute predetermined overhead rates and explain why estimated overhead costs (rather than actual ov

12、erhead costs) are used in the costing process.18Why Use an Allocation Base?Manufacturing overhead is applied to jobs that are in process. An allocation base, such as direct labor hours, direct labor dollars, or machine hours, is used to assign manufacturing overhead to individual jobs.We use an allo

13、cation base because:It is impossible or difficult to trace overhead costs to particular jobs.Manufacturing overhead consists of many different items ranging from the grease used in machines to production managers salary.Many types of manufacturing overhead costs are fixed even though output fluctuat

14、es during the period.19 The predetermined overhead rate (POHR) used to apply overhead to jobs is determined before the period begins.Manufacturing Overhead ApplicationEstimated total manufacturingoverhead cost for the coming periodEstimated total units in theallocation base for the coming periodPOHR

15、 =Ideally, the allocation base is a cost driver that causes overhead.20Using a predetermined rate makes itpossible to estimate total job costs sooner.Actual overhead for the period is notknown until the end of the period.The Need for a POHR21Determining Predetermined Overhead RatesPredetermined over

16、head rates are calculated using a three-step process.Estimate the level of production for the period.Estimate total amount of the allocation base for the period.Estimate total manufacturing overhead costs.POHR = 22Actual amount of allocation is based upon the actual level of activity (normal costing

17、 system).Based on estimates, and determined before the period begins.Application of Manufacturing OverheadOverhead applied = POHR Actual activity 23For each direct labor hour worked on a particular job, $4.00 of factory overhead will be applied to that job.Overhead Application RatePOHR = $4.00 per D

18、LH$640,000160,000 direct labor hours (DLH)POHR =Estimated total manufacturingoverhead cost for the coming periodEstimated total units in theallocation base for the coming periodPOHR =24Learning Objective 4Compute the total cost and average cost per unit of a job.25Job-Order Cost Accounting26Job-Orde

19、r Cost Accounting27Interpreting the Average Unit CostThe average unit cost should not be interpretedas the costs that would actually be incurred if anadditional unit was produced.Fixed overhead would not change if another unitwas produced, so the incremental cost of another unit is something less th

20、an $118.28Quick Check Job WR53 at NW Fab, Inc. required $200 of direct materials and 10 direct labor hours at $15 per hour. Estimated total overhead for the year was $760,000 and estimated direct labor hours were 20,000. What would be recorded as the cost of job WR53?a. $200.b. $350.c. $380.d. $730.

21、29 Job WR53 at NW Fab, Inc. required $200 of direct materials and 10 direct labor hours at $15 per hour. Estimated total overhead for the year was $760,000 and estimated direct labor hours were 20,000. What would be recorded as the cost of job WR53?a. $200.b. $350.c. $380.d. $730.Quick Check 30Learn

22、ing Objective 5Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.31Job-Order Costing Document Flow SummaryA sales order is the basis of issuing a production order. A production order initiates work on a job.32Job-Order CostingDocument

23、Flow SummaryJob Cost SheetsMaterialsRequisitionManufacturing Overhead AccountDirect materialsIndirect materialsMaterialsused may beeither direct orindirect.33Job-Order CostingDocument Flow SummaryJob Cost SheetsEmployee Time TicketManufacturing Overhead AccountAnemployeestime may be eitherdirect ori

24、ndirect.Direct LaborIndirect Labor34Job-Order CostingDocument Flow SummaryManufacturing Overhead AccountOtherActual OHChargesJob Cost SheetsPOHR rate used to apply overheadMaterialsRequisitionEmployeeTime TicketIndirectLaborIndirectMaterial35Learning Objectives 5 and 8Understand the flow of costs in

25、 a job-order costing system and prepare appropriate journal entries to record costs. Use T-accounts to show the flow of costs in a job-order costing system.36Job-Order Costing: The Flow of CostsThe transactions (in T-account and journal entry form) that capture the flow of costs in a job-order costi

26、ng system are illustrated on the following slides.37Raw MaterialsMaterialPurchasesMfg. OverheadWork in Process(Job Cost Sheet)ActualAppliedDirect MaterialsDirect MaterialsIndirect MaterialsIndirect MaterialsThe Purchase and Issue of Raw Materials38Cost Flows Material Purchases Raw material purchases

27、 are recorded in aninventory account. 39Cost Flows Material Usage Direct materials issued to a job increase Work in Process and decrease Raw Materials. Indirect materials used are charged to Manufacturing Overhead and also decrease Raw Materials. 40Mfg. OverheadSalaries and Wages PayableWork in Proc

28、ess(Job Cost Sheet)Direct MaterialsDirect LaborDirect LaborIndirect MaterialsActualAppliedIndirectLaborIndirectLaborThe Recording of Labor Costs41The Recording of Labor Costs The cost of direct labor incurred increases Work in Process and the cost of indirect labor increases Manufacturing Overhead.

29、42Mfg. OverheadSalaries and Wages PayableWork in Process(Job Cost Sheet)Direct MaterialsDirect LaborDirect LaborIndirect MaterialsActualAppliedIndirectLaborIndirectLaborRecording Actual Manufacturing OverheadOtherOverhead43Recording Actual Manufacturing Overhead In addition to indirect materials and

30、 indirect labor, other manufacturing overhead costs are charged to the Manufacturing Overhead account as they are incurred. 44Learning Objective 6Apply overhead cost to Work in Process using a predetermined overhead rate.45Mfg. OverheadSalaries and Wages PayableWork in Process(Job Cost Sheet)Direct

31、MaterialsDirect LaborDirect LaborIndirect MaterialsActualAppliedIndirectLaborIndirectLaborApplying Manufacturing OverheadOtherOverheadOverhead AppliedOverheadApplied to Work inProcessIf actual and applied manufacturing overheadare not equal, a year-end adjustment is required.46Applying Manufacturing

32、 Overhead Work in Process is increased when Manufacturing Overhead is applied to jobs. 47Accounting for Nonmanufacturing CostNonmanufacturing costs are not assigned to individual jobs; rather, they are expensed in the period incurred.Examples:1. Salary expense of employeeswho work in a marketing, se

33、lling,or administrative capacity.2. Advertising expenses are expensedin the period incurred.48Accounting for Nonmanufacturing Cost Nonmanufacturing costs (period expenses) are charged to expense as they are incurred. 49Learning Objective 7Prepare schedules of cost of goods manufactured and cost of g

34、oods sold.50Finished GoodsWork in Process(Job Cost Sheet)Direct MaterialsDirect LaborOverhead AppliedCost ofGoodsMfd. Cost ofGoodsMfd. Transferring Completed Units51Transferring Completed Units As jobs are completed, the Cost of Goods Manufactured is transferred to Finished Goods from Work in Proces

35、s. 52Finished GoodsCost of Goods SoldWork in Process(Job Cost Sheet)Direct MaterialsDirect LaborOverhead AppliedCost ofGoodsMfd. Cost ofGoodsMfd. Cost ofGoodsSold Cost ofGoodsSold Transferring Units Sold53Transferring Units Sold When finished goods are sold, two entries are required: (1) to record t

36、he sale, and (2) to record the Cost of Goods Sold. 54Learning Objective 9Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts.55Problems of Overhead ApplicationThe difference between the overhead co

37、st applied to Work in Process and the actual overhead costs of a period is referred to as either underapplied or overapplied overhead.Underapplied overhead exists when the amount of overhead applied to jobs during the period using the predetermined overhead rate is less than the total amount of over

38、head actually incurred during the period.Overapplied overhead exists when the amount of overhead applied to jobs during the period using the predetermined overhead rate is greater than the total amount of overhead actually incurred during the period.56 PearCos actual overhead for the year was $650,0

39、00 with a total of 170,000 direct labor hours worked on jobs.How much total overhead was applied to PearCos jobs during the year? Use PearCos predetermined overhead rate of $4.00 per direct labor hour. Overhead Application ExampleOverhead Applied During the PeriodApplied Overhead = POHR Actual Direc

40、t Labor HoursApplied Overhead = $4.00 per DLH 170,000 DLH = $680,00057 PearCos actual overhead for the year was $650,000 with a total of 170,000 direct labor hours worked on jobs.How much total overhead was applied to PearCos jobs during the year? Use PearCos predetermined overhead rate of $4.00 per

41、 direct labor hour. Overhead Applied During the PeriodApplied Overhead = POHR Actual Direct Labor HoursApplied Overhead = $4.00 per DLH 170,000 DLH = $680,000Overhead Application ExamplePearCo has overappliedoverhead for the yearby $30,000. What willPearCo do?58 Tiger, Inc. had actual manufacturing

42、overhead costs of $1,210,000 and a predetermined overhead rate of $4.00 per machine hour. Tiger, Inc. worked 290,000 machine hours during the period. Tigers manufacturing overhead isa. $50,000 overapplied.b. $50,000 underapplied.c. $60,000 overapplied.d. $60,000 underapplied.Quick Check 59 Tiger, In

43、c. had actual manufacturing overhead costs of $1,210,000 and a predetermined overhead rate of $4.00 per machine hour. Tiger, Inc. worked 290,000 machine hours during the period. Tigers manufacturing overhead isa. $50,000 overapplied.b. $50,000 underapplied.c. $60,000 overapplied.d. $60,000 underappl

44、ied.Quick Check Overhead Applied $4.00 per hour 290,000 hours = $1,160,000Underapplied Overhead $1,210,000 - $1,160,000 = $50,00060Disposition of Under- or Overapplied Overhead$30,000 may beclosed directly to cost of goods sold.Cost of Goods SoldPearCos MethodWork inProcessFinishedGoods Cost of Good

45、s Sold$30,000may be allocatedto these accounts.OR61Disposition of Under- or Overapplied Overhead PearCosMfg. OverheadActualoverhead costs$650,000$30,000 overapplied PearCos Costof Goods SoldUnadjusted BalanceAdjustedBalance$30,000$30,000Overhead appliedto jobs $680,00062Allocating Under- or Overappl

46、ied Overhead Between AccountsAssume the overhead applied in ending Work in Process Inventory, ending Finished Goods Inventory, and Cost of Goods Sold is shown below:63Allocating Under- or Overapplied Overhead Between AccountsWe would complete the following allocation of $30,000 overapplied overhead:10% $30,00064Allocating Under- or Overapplied Overhead Between Accounts65Overapplied and Underappl