Job Order and Process Costing
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Transcript Job Order and Process Costing
Job Order and Process Costing
Job Order
Custom/built to order products
House
Cost = direct labor + direct materials + overhead applied
Process
Products priced the same
BUS 2102 textbooks
Bushel of soybeans
Cost = total manufacturing cost/total units
Job Order and Process Costing
Pricing
ER visit
Bagels
Aircraft carrier
Dent car door
Box of paper clips
Charleston newspaper
Job Order and Process Costing
Job Order
Overhead Cost
Track actual overhead or,
Guess (normal costing using estimated overhead)
Overhead rate = Estimated Overhead/Estimated Units
Estimating Overhead
Units: labor and machine
Applying Overhead
Labor hours (lots of peons – lawyers)
Machine hours (highly mechanized – paper clip factory)
Hours x Overhead Rate = Overhead Applied
Under/Over Applied
Less busy: ____ applied
Overhead costs lower than expected: _____ applied
Cost of Goods Sold is adjusted for over/under applied overhead
Job Order and Process Costing
Process Costing
Equivalent Units Weighted Average Method
(combines Beginning WIP and current
period units/costs)
Costs = Beg WIP costs + Cost this
Period
Total Units = Units Completed +
Ending WIP Equivalent Units
Job Order and Process Costing
Total Costs / Total Units = Cost Per Unit
Amount to Finished Goods = Finished
Units x Unit Cost
Ending WIP = Ending WIP equivalent
units x unit cost
Example: Exercise 6-26: Page 246
Job Order and Process Costing
Job Order
Job Cost Sheets
Total for all jobs equals Work In Process