2 - 1 Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show Job Order Cost Accounting

2 - 2 Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show Cost Accounting An area of accounting that involves:  Measuring  Recording  Reporting

2 - 3 Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show Job Order Cost Flow Illustration 2-3

Job Order Cost Accounting Illustration 2-4

2 - 5 Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show Job Cost Sheet A form used to record the costs chargeable to a job to determine: the total and unit cost of the completed job. Illustration 2-6

2 - 6 Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show Receive orders from customers. Schedule jobs. Order materials. Begin production. Events in Job Order Manufacturing

2 - 7 Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show Goods in Process Cost of Goods Sold Labor Materials Indirect Finished Goods Factory Overhead Direct Allocate Job Order Manufacturing Activities Indirect

2 - 8 Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show Labor Time Ticket J. Khan M16 J hours $28 $196 Date: 8/03

2 - 9 Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show Flow of Manufacturing Costs DM Materials Work in Process Finished Goods Wages Payable Factory Overhead Cost of Goods Sold DM Materials Purchased Total Wages Direct materials used in production DM

Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show DM Materials Work in Process Finished Goods Wages Payable Factory Overhead Cost of Goods Sold IM DM Materials Purchased Total Wages Indirect materials used in production IM Flow of Manufacturing Costs IM

Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show DM Materials Work in Process Finished Goods Wages Payable DL Factory Overhead Cost of Goods Sold IM DM Materials Purchased Total Wages Direct labor used in production DL Flow of Manufacturing Costs IM DL

Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show DM Materials Work in Process Finished Goods Wages Payable DL Factory Overhead Cost of Goods Sold IM IL DM IM DL IL Materials Purchased Total Wages Indirect labor used in production IL Flow of Manufacturing Costs

Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show DM Materials Work in Process Finished Goods Wages Payable DL Factory Overhead Cost of Goods Sold IM IL DM IM DL IL Materials Purchased Total Wages Other factory overhead costs incurred during production OFOH Flow of Manufacturing Costs OFOH

Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show DM Materials Work in Process Finished Goods Wages Payable DL Factory Overhead Cost of Goods Sold IM IL DM IM DL IL OFOH Materials Purchased Total Wages Based on predetermined overhead rate FOHA Factory overhead applied to work in process FOHA Flow of Manufacturing Costs FOHA

Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show DM Materials Work in Process Finished Goods Wages Payable DL Factory Overhead Cost of Goods Sold IM IL DM IM DL FOHA IL OFOHCOGMCOGM Materials Purchased Total Wages FOHA Cost of goods manufactured and transferred to finished goods COGM Flow of Manufacturing Costs

Purposes of Cost Accounting Flow of Costs in Job Order Importance of Job Cost Sheet Predetermined Overhead Rate Entries for Jobs Completed/Sold Under- and Over-applied Overhead Next Slide Previous Slide End Show DM Materials Work in Process Finished Goods Wages Payable DL Factory Overhead Cost of Goods Sold IM IL DM IM DL FOHA IL OFOH SOLD Materials Purchased Total Wages FOHA Finished goods sold SOLD COGMCOGM Flow of Manufacturing Costs SOLD