Kế toán, kiểm toán - Chapter 27: Job order cost accounting

A job order cost accounting system is used by businesses that produce special orders or produce more than one product in batches. A process cost accounting system is used when standard products are manufactured using a continuous process. A standard cost accounting system, in which standard costs of production are measured, can be used with a job order or a process cost system.

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1-*McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.Job Order Cost Accounting Section 1: Cost AccountingChapter27Section ObjectivesExplain how a job order cost accounting system operates.A job order cost accounting system is used by businesses that produce special orders or produce more than one product in batches.A process cost accounting system is used when standard products are manufactured using a continuous process.A standard cost accounting system, in which standard costs of production are measured, can be used with a job order or a process cost system.Types of Cost Accounting SystemsRaw Materials InventoryWork in Process InventoryFinished Goods InventoryCost of Goods SoldPurchasesIssuedMaterialsLaborOverheadTransferred outTransferred inTransferred outTransferred inWages PayableCharged to Work in ProcessManufacturing OverheadIndirect MaterialsIndirect LaborOtherApplied to Work in ProcessProcurementProductionWarehousingSellingFlow of Costs through a Job Order Cost Accounting System The perpetual inventory system tracks inventories on hand at all times. The following accounts are involved in a perpetual inventory system: Raw Materials Inventory Wages Payable Manufacturing Overhead Work in Process Inventory Finished Goods Inventory Cost of Goods SoldPerpetual Inventory SystemComputing the Balance of the Work in Process InventoryBeginning inventory of work in process xxEnding inventory of work in process xxReflects the cost of partially completed unitsDeduct cost of goods completed xxAdd direct materials, direct labor, and manufacturing overhead charged to production xx xxComputing the Balance ofFinished Goods InventoryBeginning inventory of finished goods xxEnding inventory of finished goods xxRepresents the cost of finished goods on handDeduct cost of goods sold xxAdd cost of goods manufactured xx xxJust-in-Time Inventory SystemsUsed by companies who wish to eliminate raw materials inventory.Raw materials ordered to arrive just in time to be placed into production. Costs of arriving materials placed immediately into Work in Process Inventory. Reduces amount of capital tied up in inventory.Reduces inventory storage space.Reduces costs for storeroom personnel, insurance, and recordkeeping.Job Order Cost Accounting Section 2: Job Order CostAccounting SystemChapter27Section ObjectivesJournalize the purchase and issuance of direct and indirect materials.Maintain perpetual inventory records.Record labor costs incurred and charge labor into production.Compute overhead rates and apply overhead to jobs.Compute overapplied or underapplied overhead and report it in the financial statements. When pricing the raw materials inventory, three common methods are used: FIFO LIFO Average Cost Each method reflects a different valuation of raw materials inventory. Each company determines its own pricing policy. Cost BasisLabor CostsWorkers complete a separate time ticket for each job.The total charged to all cost sheets must agree with direct labor debited to Work in Process Inventory.All labor time tickets are sorted by job, summarized at end of the payroll period, and entered on job order cost sheets.Recording Labor Costs Includes all manufacturing costs except direct materials and direct labor. Examples: Indirect materials Indirect labor Depreciation Insurance Utilities RentManufacturing Overhead Compute overhead rates and apply overhead to jobsObjective 5 Overhead costs are applied to specific jobs based on an overhead application rate. Several different bases can be used to develop the overhead application rate. Some of more common bases for allocating overhead are: Based on direct labor costs. Based on direct labor hours Based on machine hours.Applying Overhead to JobsAt month-end, compare the total credits in Manufacturing Overhead Applied to the total debits in Manufacturing Overhead.If credits in Manufacturing Overhead Applied are less than debits in Manufacturing Overhead, overhead has been underapplied.If debits in Manufacturing Overhead are less than credits in Manufacturing Overhead Applied, overhead has been overapplied. Compute overapplied or underapplied overhead and report it in the financial statementsObjective 6Determining Overapplied or Underapplied OverheadJob Order Cost Accounting Section 3: Accounting for Job OrdersChapter27Section ObjectivesMaintain job order cost sheets.Record the cost of jobs completed and the cost of goods sold under a perpetual inventory system.Each job started in production has its own job order cost sheet.The cost sheets constitute the subsidiary ledger for the Work in Process account. The job cost sheet totals should equal the general ledger account balance.The cost sheet shows:Direct materialsDirect laborOverhead Maintain job order cost sheetsObjective 7Job Order Cost SheetApply overhead using predetermined rateTotal the costs when the job is completedJob Order Cost SheetEnter materials usedEnter labor costsCost of Goods Sold (Perpetual Inventory)Instead of showing overapplied or underapplied overhead on the income statement, the accountant might prefer to show actual manufacturing costs on the statement of cost of goods manufactured.