GSU ACCT 2102 - p210204 (21 pages)

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p210204

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Lecture Notes


Pages:
21
School:
Georgia State University
Course:
Acct 2102 - Prin of Acct Ii
Prin of Acct Ii Documents

Unformatted text preview:

JOB ORDER COSTING Chapter 4 Accounting Principles II AC 2102 Fall Semester 1999 Chapter 5 1 Two Basic Types Of Production Job Order Production Costing Production of unique one of a kind products Note the job can contain a batch of these special distinct units Process Production Costing Mass production of large quantities of similar or homogeneous products Chapter 5 2 Job Order Cost Systems Unique one of a kind custom made tailor made built to order products Often a job is associated with a particular customer s order Costs collected by job Frequently prices are based on costs in a job order environment Examples printing construction furniture making auto repairs Chapter 5 3 Process Costing Systems Mass production of large quantities of similar or homogeneous products Accumulate production costs by process or department for a given period of time The output for the process for that period is also measured Unit costs are computed by dividing the total process costs for the period by the output Example gallons of paint cans of corn bottles of softdrinks boxes of cereal Chapter 5 4 Job Order vs Process Costing Job Order Costing Process Costing Homogeneous products Wide Variety of distinct products Costs accumulated by job Costs accumulated by process or department Unit costs computed by dividing total job costs by Unit costs computed by dividing process costs of units produced on that job the period by the units produced in the period Chapter 5 5 Assigning Costs To A Job Production costs consist of direct materials direct labor and manufacturing overhead Overhead can be assigned using traditional approaches or an activity based approach Thus overhead can be assigned to a job using one of the three following methods 1 unit based plant wide overhead rates 2 unit based departmental overhead rates 3 activity based costing Chapter 5 6 Applying Overhead Using Unit Level Systems Unit level systems include applying overhead using plant wide or departmental rates based on direct



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