Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
10 Cards in this Set
- Front
- Back
- 3rd side (hint)
|
What is Job Order Costing?
|
A costing technique used to accumulate costs related to the production of large, expenseive, homogeneous (custom) items. -- Can be used for Service items.
|
Costing Technique, accumulate costs
|
|
|
Describe the process of accumulating costs in a job order costing system.
|
1. The costs are accumulated in individual WIP accounts, also called job order cost sheets. The TOTAL of each job (WIP acct) is transferred to the WIP-Control account.
2. Overhead is applied based on a predetermined rate 3. When job is complete, the total cost is transferred to Finished Goods. 4. When sold, costs flow to CGS. |
Accumulates and flows thru four general areas
|
|
|
In the job order costing, how is "Cost of Goods Completed" calculated?
|
Use the same method as used when calculating CGS.
+ Beg WIP + DM + DL + FOA = Tot Manuf Cost to Acct For - E WIP = Cost of Goods Completed (manuf) |
|
|
|
What is Cost of Goods Completed?
|
It is the same as the Cost of Goods Manufactured.
|
|
|
|
What is Factory Overhead Applied (FOA)?
|
It is the estimated overhead for the period. This amt is calc at the beg of the period and then charged to WIP. Actual Overhead costs are kept separately and expensed. Any difference between applied and actual is under or overapplied overhead. Under/Over applied overhead is charged to WIP and when sold, to CGS.
|
|
|
|
How is Factory Overhead calculated?
|
By applying the PDRate to the actual activity units used in production.
|
|
|
|
What is the calculation for the predetermined rate for overhead?
|
PDR = Est Tot Manf Cost/Est Norm Activity Volume
* The estimates must be based on attainable standards. |
|
|
|
What is Process Costing?
|
A costing technique used to accumulate costs for mass-produced, continuous, homogeneous items which are often small and inexpensive.
|
Costing technique, accumulates costs
|
|
|
What is the problem that occurs with process costing?
|
Since costs are not accumulated for individual items the problem becomes one of TRACKING the # of units moving thru WIP into FG and allocating the costs incurred to these units on a rational basis.
|
|
|
|
What complicates the process costing?
|
1. There may be partially completed goods in beg and end inventories.
2. Each of the 3 factors of production (DM, DL, FO) may be at different levels of completion. 3. Some costs do not occur uniformly across the process; esp DM. 4. There are two methods for calculating "equivalent units," FIFO and Weighted Avg. (These are not the same as the cost flow assumptions in financial acctg0 |
4 things
|
