Beruflich Dokumente
Kultur Dokumente
Job-Order Costing
.
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3.
4.
5.
6.
Copyright2015,TheMcGrawHillCompanies,Inc.
Job-order
Costing
A company
company produces
produces many
many units
units of
of aa single
single
product.
product.
One
One unit
unit of
of product
product is
is indistinguishable
indistinguishable from
from
other
other units
units of
of product.
product.
The
The identical
identical nature
nature of
of each
each unit
unit of
of product
product enables
enables
assigning
assigning the
the same
same average
average cost
cost per
per unit.
unit.
McGrawHill/Irwin
Copyright2015,TheMcGrawHillCompanies,Inc.
Job-order
Costing
A company
company produces
produces many
many units
units of
of aa single
single
product.
product.
Example companies:
Pnar
St
products
)
unit
of
product
is
from
1.One
One
unit
of(dairy
product
is indistinguishable
indistinguishable
from
other
product.
DYOof
(chemical)
other2.units
units
ofPaints
product.
Coca-Cola
bottling
identical
nature
of
unit
of
3.The
The
identical(mixing
nature and
of each
each
unit beverages)
of product
product enables
enables
assigning
assigning the
the same
same average
average cost
cost per
per unit.
unit.
McGrawHill/Irwin
Copyright2015,TheMcGrawHillCompanies,Inc.
Job-order
Costing
Many
Many different
different products
products are
are produced
produced each
each period.
period.
Products
Products are
are manufactured
manufactured to
to order.
order.
The
The unique
unique nature
nature of
of each
each order
order requires
requires tracing
tracing or
or
allocating
allocating costs
costs to
to each
each job,
job, and
and maintaining
maintaining cost
cost
records
records for
for each
each job.
job.
McGrawHill/Irwin
Copyright2015,TheMcGrawHillCompanies,Inc.
Job-order
Costing
Many
Many different
different products
products are
are produced
produced each
each period.
period.
Example companies:
are
to
Products
are manufactured
manufactured
to order.
order.
1.Products
Boeing (aircraft
manufacturing)
unique
nature
each
order
2.The
The
unique
nature
ofscale
eachconstruction)
order requires
requires tracing
tracing or
or
Mesa
Insaat
(largeof
costs
to
job,
maintaining
allocating
costs
to each
each
job, and
and
maintaining cost
cost
3.allocating
Walt Disney
Studios
(movie
production)
records for each job.
records
records for
for each
each job.
job.
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Quick Check
Which
Which of
of the
the following
following companies
companies would
would
be
be likely
likely to
to use
use job-order
job-order costing
costing rather
rather
than
than process
process costing?
costing?
a.
a. Eczacba
Eczacba for
for Selpak.
Selpak.
b.
b. Architects.
Architects.
c.
c. Tamek
Tamek for
for ketchup.
ketchup.
d.
d. Caterer
Caterer for
for aa wedding
wedding reception.
reception.
e.
e. Builder
Builder of
of commercial
commercial fishing
fishing vessels.
vessels.
McGrawHill/Irwin
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Quick Check
Which
Which of
of the
the following
following companies
companies would
would
be
be likely
likely to
to use
use job-order
job-order costing
costing rather
rather
than
than process
process costing?
costing?
a.
a. Eczacba
Eczacba for
for Selpak.
Selpak.
b.
b. Architects.
Architects.
c.
c. Tamek
Tamek for
for ketchup.
ketchup.
d.
d. Caterer
Caterer for
for aa wedding
wedding reception.
reception.
e.
e. Builder
Builder of
of commercial
commercial fishing
fishing vessels.
vessels.
McGrawHill/Irwin
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Direct
DirectMaterials
Materials
Direct
DirectLabor
Labor
Manufacturing
Manufacturing
Overhead
Overhead
McGrawHill/Irwin
Job
JobNo.
No.11
Job
JobNo.
No.22
Job
JobNo.
No.33
Charge
Charge
direct
direct
material
material and
and
direct
direct labor
labor
costs
costs to
to
each
each job
job as
as
work
work is
is
performed.
performed.
Copyright2015,TheMcGrawHillCompanies,Inc.
Direct
DirectMaterials
Materials
Direct
DirectLabor
Labor
Manufacturing
Manufacturing
Overhead
Overhead
McGrawHill/Irwin
Job
JobNo.
No.11
Job
JobNo.
No.22
Job
JobNo.
No.33
Manufacturing
Manufacturing
Overhead,
Overhead,
including
including
indirect
indirect
materials
materials and
and
indirect
indirect labor
labor,,
are
are allocated
allocated to
to
jobs
jobs rather
rather than
than
directly
directly traced
traced
to
to each
each job.
job.
Copyright2015,TheMcGrawHillCompanies,Inc.
Direct Labor
Manufacturing Overhead
Ticket Hours Amount Hours
Rate
Amount
Cost Summary
Direct Materials
Direct Labor
Manufacturing Overhead
Total Cost
Unit Product Cost
McGrawHill/Irwin
Units Shipped
Date Number Balance
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Will E. Delite
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Ideally,
Ideally, the
the allocation
allocation base
base
is
is aa cost
cost driver
driver that
that causes
causes
overhead.
overhead.
McGrawHill/Irwin
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Based
Based on
on estimates,
estimates, and
and
determined
determined before
before the
the
period
period begins.
begins.
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POHR =
POHR =
For
For each
each direct
direct labor
labor hour
hour worked
worked on
on aa
particular
particular job,
job, $4.00
$4.00 of
of factory
factory overhead
overhead
will
will be
be applied
applied to
to that
that job.
job.
McGrawHill/Irwin
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Quick Check
Job
Job WR53
WR53 at
at NW
NW Fab,
Fab, Inc.
Inc. required
required $200
$200 of
of
direct
direct materials
materials and
and 10
10 direct
direct labor
labor hours
hours at
at
$15
$15 per
per hour.
hour. Estimated
Estimated total
total overhead
overhead for
for
the
the year
year was
was $760,000
$760,000 and
and estimated
estimated direct
direct
labor
labor hours
hours were
were 20,000.
20,000. What
What would
would be
be
recorded
recorded as
as the
the cost
cost of
of job
job WR53?
WR53?
a.
a. $200.
$200.
b.
b. $350.
$350.
c.
c. $380.
$380.
d.
d. $730.
$730.
McGrawHill/Irwin
Copyright2015,TheMcGrawHillCompanies,Inc.
Quick Check
Job
Job WR53
WR53 at
at NW
NW Fab,
Fab, Inc.
Inc. required
required $200
$200 of
of
direct
direct materials
materials and
and 10
10 direct
direct labor
labor hours
hours at
at
$15
$15 per
per hour.
hour. Estimated
Estimated total
total overhead
overhead for
for
the
the year
year was
was $760,000
$760,000 and
and estimated
estimated direct
direct
labor
labor hours
hours were
were 20,000.
20,000. What
What would
would be
be
recorded
recorded as
as the
the cost
cost of
of job
job WR53?
WR53?
a.
a. $200.
$200.
b.
b. $350.
$350.
c.
c. $380.
$380.
d.
d. $730.
$730.
McGrawHill/Irwin
Copyright2015,TheMcGrawHillCompanies,Inc.
Job-Order Costing
Document Flow Summary
Lets summarize
the document flow
in a job-order
costing system.
McGrawHill/Irwin
Copyright2015,TheMcGrawHillCompanies,Inc.
Job-Order Costing
Document Flow Summary
A
A sales
sales order
order is
is the
the
basis
basis of
of issuing
issuing aa
production
production order.
order.
McGrawHill/Irwin
A
A production
production
order
order initiates
initiates
work
work on
on aa job.
job.
Copyright2015,TheMcGrawHillCompanies,Inc.
Job-Order Costing
Document Flow Summary
Materials
Materialsused
used
may
may be
beeither
either
direct
director
or
indirect.
indirect.
Direct
materials
Job
Job Cost
Cost
Sheets
Sheets
Materials
Materials
Requisition
Requisition
Indirect
materials
McGrawHill/Irwin
Manufacturing
Manufacturing
Overhead
Overhead
Account
Account
Copyright2015,TheMcGrawHillCompanies,Inc.
Job-Order Costing
Document Flow Summary
An
Anemployees
employees
time
timemay
maybe
beeither
either
direct
direct or
orindirect.
indirect.
Direct
Labor
Job
Job Cost
Cost
Sheets
Sheets
Employee
EmployeeTime
Time
Ticket
Ticket
Indirect
Labor
McGrawHill/Irwin
Manufacturing
Manufacturing
Overhead
Overhead
Account
Account
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Job-Order Costing
Document Flow Summary
Employee
Employee
Time
TimeTicket
Ticket
Other
Other
Actual
Actual OH
OH
Charges
Charges
Materials
Materials
Requisition
Requisition
McGrawHill/Irwin
Indirect
Labor
Manufacturing
Manufacturing Applied
Overhead
Overhead
Overhead
Account
Account
Job
Job Cost
Cost
Sheets
Sheets
Indirect
Material
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Journal Entries
Purchase of materials on credit, $89,000
_________ / ____________
Materials Inventory 89,000
Accounts Payable
89,000
_________ / ____________
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Journal Entries
Incurred direct ($39,000) and indirect (OH) labor
wages ($15,000), paid in cash
_________ / ____________
Work-in-Process
39,000
Manufacturing Overhead
15,000
Cash
54,000
_________ / ____________
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Journal Entries
Incurring or recording of various actual
indirect costs: Supervision & engineering salaries:
$44,000, paid in cash; plant utilities, repairs, &
insurance: $13,000; plant depreciation: $18,000
_________ / ____________
Manufacturing Overhead
75,000
Salaries Payable 44,000
Accounts Payable
3,000
Cash
44,000
Accumulated Depreciation
18,000
Prepaid Expenses
10,000
_________ / ____________
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Journal Entries
_________ / ____________
Work-in-Process
80,000
Manufacturing Overhead80,000
_________ / ____________
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Journal Entries
Products are completed and transferred out of
production in preparation for being sold,
$188,800.
_________ / ____________
Finished Goods Inventory
188,800
Work-in-Process
188,800
_________ / ____________
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Journal Entries
Products are sold to customers on credit, $270,000
_________ / ____________
Accounts Receivable 270,000
Sales Revenue
270,000
_________ / ____________
180,000
_________ / ____________
Note: The difference between the sales and cost of goods sold
amounts represents the gross margin (profit) on this particular
transaction.
McGrawHill/Irwin
Copyright2015,TheMcGrawHillCompanies,Inc.
Journal Entries
Marketing costs for February, $45,000, and
customer service costs for February,
$15,000, paid in cash,
_________ / ____________
Marketing Expenses
45,000
Selling Expenses
15,000
Cash Control
60,000
_________ / ____________
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Work in Process
(Job Cost Sheet)
Direct
Materials
Mfg. Overhead
Actual Applied
Indirect
Materials
McGrawHill/Irwin
Copyright2015,TheMcGrawHillCompanies,Inc.
Work in Process
(Job Cost Sheet)
Direct
Direct
Materials
Labor
Mfg. Overhead
Actual Applied
Indirect
Materials
Indirect
Labor
McGrawHill/Irwin
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Work in Process
(Job Cost Sheet)
Direct
Direct
Materials
Labor
Mfg. Overhead
Actual Applied
Indirect
Materials
Indirect
Labor
Other
Overhead
McGrawHill/Irwin
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Mfg. Overhead
Actual Applied
Indirect
Materials Overhead
Indirect
Applied to
Labor
Work in
Other
Process
Overhead
McGrawHill/Irwin
Work in Process
(Job Cost Sheet)
Direct
Direct
Materials
Labor
Overhead
Applied
IfIf actual
actual and
and applied
applied
manufacturing
manufacturing overhead
overhead
are
are not
not equal,
equal, aa year-end
year-end
adjustment
adjustment is
is required.
required.
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Direct
Materials
Labor
Overhead
Applied
McGrawHill/Irwin
Finished Goods
Cost of
Goods
Mfd.
Cost of
Goods
Mfd.
Copyright2015,TheMcGrawHillCompanies,Inc.
Direct
Materials
Labor
Overhead
Applied
Finished Goods
Cost of
Goods
Mfd.
Cost of
Goods
Mfd.
Cost of
Goods
Sold
McGrawHill/Irwin
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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.
Copyright2015,TheMcGrawHillCompanies,Inc.
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Quick Check
Tiger,
Tiger,Inc.
Inc. had
had actual
actual manufacturing
manufacturing overhead
overhead
costs
costs of
of $1,210,000
$1,210,000 and
and aa predetermined
predetermined
overhead
overhead rate
rate of
of $4.00
$4.00 per
per machine
machine hour.
hour. Tiger,
Tiger,
Inc.
Inc. worked
worked 290,000
290,000 machine
machine hours
hours during
during the
the
period.
period. Tigers
Tigersmanufacturing
manufacturing overhead
overhead is
is
a.
a.
b.
b.
$50,000
$50,000 overapplied.
overapplied.
$50,000
$50,000 underapplied.
underapplied.
c.
c.
d.
d.
$60,000
$60,000 overapplied.
overapplied.
$60,000
$60,000 underapplied.
underapplied.
McGrawHill/Irwin
Copyright2015,TheMcGrawHillCompanies,Inc.
Quick Check
Tiger,
Tiger,Inc.
Inc. had
had actual
actual manufacturing
manufacturing overhead
overhead
costs
costs of
of $1,210,000
$1,210,000 and
and aa predetermined
predetermined
overhead
overhead rate
rate of
of $4.00
$4.00 per
per machine
machine hour.
hour. Tiger,
Tiger,
Inc.
hours
Overhead
Inc. worked
worked 290,000
290,000 machine
machine
hours during
during the
the
OverheadApplied
Applied
$4.00
hour
period.
is
$4.00per
peroverhead
hour290,000
290,000
hours
period. Tigers
Tigersmanufacturing
manufacturing
overhead
ishours
== $1,160,000
$1,160,000
a.
a.
b.
b.
$50,000
$50,000 overapplied.
overapplied.
Underapplied
UnderappliedOverhead
Overhead
$1,210,000
--$1,160,000
$1,210,000
$1,160,000
$50,000
underapplied.
$50,000 underapplied.
c.
c.
d.
d.
$60,000
$60,000 overapplied.
overapplied.
$60,000
$60,000 underapplied.
underapplied.
McGrawHill/Irwin
== $50,000
$50,000
Copyright2015,TheMcGrawHillCompanies,Inc.
$30,000
may be allocated
to these accounts.
$30,000 may be
closed directly to
cost of goods sold.
OR
Work
Work in
in
Process
Process
Finished
Finished
Goods
Goods
Cost
Cost of
of
Goods
Goods Sold
Sold
McGrawHill/Irwin
Cost
Cost of
of
Goods
Goods Sold
Sold
Copyright2015,TheMcGrawHillCompanies,Inc.
PearCos Cost
of Goods Sold
Unadjusted
Balance
Actual Overhead
overhead applied
costs
to jobs
$30,000
Adjusted
Balance
McGrawHill/Irwin
PearCos
Mfg. Overhead
$650,000
$30,000
$680,000
$30,000
overapplied
Copyright2015,TheMcGrawHillCompanies,Inc.
McGrawHill/Irwin
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Copyright2015,TheMcGrawHillCompanies,Inc.
Alternative 1
Close to Cost
of Goods Sold
Alternative 2
INCREASE
Cost of Goods Sold
INCREASE
Work in Process
Finished Goods
Cost of Goods Sold
DECREASE
Cost of Goods Sold
DECREASE
Work in Process
Finished Goods
Cost of Goods Sold
(Applied OH is less
than actual OH)
OVERAPPLIED
(Applied OH is greater
than actual OH)
McGrawHill/Irwin
Allocation
Copyright2015,TheMcGrawHillCompanies,Inc.
Quick Check
What
What effect
effect will
will the
the overapplied
overapplied overhead
overhead
have
have on
on PearCos
PearCos net
net operating
operating income?
income?
a.
a. Net
Net operating
operating income
income will
will increase.
increase.
b.
b. Net
Net operating
operating income
income will
will be
be unaffected.
unaffected.
c.
c. Net
Net operating
operating income
income will
will decrease.
decrease.
McGrawHill/Irwin
Copyright2015,TheMcGrawHillCompanies,Inc.
Quick Check
What
What effect
effect will
will the
the overapplied
overapplied overhead
overhead
have
have on
on PearCos
PearCos net
net operating
operating income?
income?
a.
a. Net
Net operating
operating income
income will
will increase.
increase.
b.
b. Net
Net operating
operating income
income will
will be
be unaffected.
unaffected.
c.
c. Net
Net operating
operating income
income will
will decrease.
decrease.
McGrawHill/Irwin
Copyright2015,TheMcGrawHillCompanies,Inc.
McGrawHill/Irwin
May be more
complex but . . .
May be more
accurate because it
reflects differences
across departments.
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McGrawHill/Irwin
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McGrawHill/Irwin
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End of Chapter 3
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