1. Chapter 4

2. Types of Product-Costing Systems
Process Costing
Job-Order Costing
Company produces many units of a single product for a long time
Mass-produced, automated continuous production process.
Costs cannot be directly traced to each unit of product.
Process costing allocates costs to products by averaging costs over large numbers of nearly identical products

3. Types of Product-Costing Systems
Process Costing
Job-Order Costing
Typical process cost applications:
Petrochemical refinery
Paint manufacturer
Paper mill

4. Types of Product-Costing Systems
Process Costing
Job-Order Costing
Job-shop operations
Products manufactured in very low volumes or one at a time.
Batch-production operations
Multiple products in batches of relatively small quantity.

5. Types of Product-Costing Systems
Process Costing
Job-Order Costing
Typical job-order cost applications:
Special-order printing
Building construction
Also used in service industry
Hospitals
Law firms

6. Materials Requisition Form

7. Employee Time Ticket

8. Job Cost Sheet

14. Practice with Overhead
Actual manufacturing overhead $340,000
Budgeted machine hours ,000
Budgeted direct labor hours ,000
Budgeted direct labor rate $14
Budgeted manufacturing oh $364,000
Actual machine hours ,000
Actual direct labor hours ,000
Actual direct labor rate $15
POHR - Machine hours
POHR - direct labor hours
POHR - direct labor dollars

15. Job-Order System Cost Flows Word Documents
Fisher Company
Journal Entries
T-Accounts
Over/Under-applied Overhead
Cost of Goods Manufactured
Cost of Goods Sold
Income Statement

16. Overapplied and Underapplied Manufacturing Overhead - Summary

22. Allocation Account Account Balance (Before Proration)
Allocated Manufacturing Overhead Included in Each Account Balance (Before Proration)
Allocated Manufacturing Overhead Included in Each Account Balance as a Percent of Total
Proration of $135,000 of Underallocated Manufacturing Overhead
Account Balance (After Proration)
Work in Process control
$ ,000
$ ,200
1.50%
0.015 x $135,000=
$ 2,025
$ ,025
Finished goods control
75,000
31,320
2.90%
0.029 x $135,000=
3,915
78,915
Cost of goods sold
2,375,000
1,032,480
95.60%
0.956 x $135,000=
129,060
2,504,060
Total
$2,500,000
$ ,080,000
100.00%
$135,000
$2,635,000