1、Chapter ThreeSystems Design:Job-Order Costing3-2ManufacturingWorkRaw MaterialsCostsIn ProcessBeginning rawDirect materialsBeginning work in materials inventory+Direct labor process inventory+Raw materials+Mfg.overhead+Total manufacturing purchased=Total manufacturing costs=Raw materials costs=Total
2、work in available for use process for the in production period Ending raw materials Ending work in inventory process inventory=Raw materials used=Cost of goods in production manufacturedProduct Cost FlowsCosts associated with the goods that are completed during the period are transferred to finished
3、 goods inventory.3-3Learning Objective 13-4Types of Product Costing SystemsProcessCostingJob-orderCosting3-5Types of Product Costing SystemsProcessCostingJob-orderCosting3-6Types of Product Costing SystemsProcessCostingJob-orderCosting3-7Types of Product Costing SystemsProcessCostingJob-orderCosting
4、3-8Comparing Process and Job-Order Costing3-9Learning Objective 23-10Manufacturing OverheadJob No.1Job No.2Job No.3Job-Order Costing An OverviewDirect MaterialsDirect Labor3-11Direct Manufacturing CostsDirect MaterialsDirect LaborJob No.1Job No.2Job No.3Manufacturing Overhead3-12PearCo Job Cost Shee
5、tJob Number A-143Date Initiated 3-4-05Date CompletedDepartment B3Units CompletedItem Wooden cargo crateDirect MaterialsDirect LaborManufacturing OverheadReq.No.AmountTicketHoursAmountHoursRateAmountCost SummaryUnits ShippedDirect MaterialsDateNumber BalanceDirect LaborManufacturing OverheadTotal Cos
6、tUnit Product CostThe Job Cost Sheet3-13Measuring Direct Materials CostWill E.Delite3-14Measuring Direct Materials Cost3-15Measuring Direct Labor Costs3-16Job-Order Cost Accounting3-17Learning Objective 33-18 The predetermined overhead rate(POHR)used to apply overhead to jobs is determined before th
7、e period begins.Manufacturing Overhead ApplicationEstimated total manufacturingoverhead cost for the coming periodEstimated total units in theallocation base for the coming periodPOHR =Ideally,the allocation base is a cost driver that causes overhead.3-19Actual amount of the allocation based upon th
8、e actual level of activity.Based on estimates,and determined before the period begins.Application of Manufacturing OverheadOverhead applied =POHR Actual activity 3-20For each direct labor hour worked on a particular job,$4.00 of factory overhead will be applied to that job.Overhead Application RateP
9、OHR =$4.00 per DLH$640,000160,000 direct labor hours(DLH)POHR =Estimated total manufacturingoverhead cost for the coming periodEstimated total units in theallocation base for the coming periodPOHR =3-21Job-Order Cost Accounting3-22Job-Order Cost AccountingPearCo Job Cost SheetJob Number A-143Date In
10、itiated 3-4-05Date Completed 3-5-05Department B3Units Completed2Item Wooden cargo crateDirect MaterialsDirect LaborManufacturing OverheadReq.No.AmountTicketHoursAmountHoursRateAmountX7-6890116$36888$84$32$Cost SummaryUnits ShippedDirect Materials116$DateNumber BalanceDirect Labor88$Manufacturing Ove
11、rhead32$Total Cost236$Unit Product Cost118$3-23Interpreting the Average Unit CostThe average unit cost should not be interpretedas the costs that would actually be incurred if anadditional unit were produced.Fixed overhead would not change if another unitwere produced,so the incremental cost of anot
12、her unit may be somewhat less than$118.3-24Quick Check Job WR53 at NW Fab,Inc.required$200 of direct materials and 10 direct labor hours at$15 per hour.Estimated total overhead for the year was$760,000 and estimated direct labor hours were 20,000.What would be recorded as the cost of job WR53?a.$200
13、.b.$350.c.$380.d.$730.3-25Quick Check Job WR53 at NW Fab,Inc.required$200 of direct materials and 10 direct labor hours at$15 per hour.Estimated total overhead for the year was$760,000 and estimated direct labor hours were 20,000.What would be recorded as the cost of job WR53?a.$200.b.$350.c.$380.d.
14、$730.3-26Learning Objective 43-27Job-Order CostingDocument Flow Summary3-28Job-Order CostingDocument Flow SummaryJob Cost SheetsMaterialsRequisitionManufacturing Overhead AccountDirect materialsIndirect materials3-29Job-Order CostingDocument Flow SummaryJob Cost SheetsEmployee Time TicketManufacturi
15、ng Overhead AccountAn employeestime may be eitherdirect or indirect.Direct LaborIndirect Labor3-30Job-Order CostingDocument Flow SummaryManufacturing Overhead AccountOtherActual OHChargesJob Cost SheetsAppliedOverheadMaterialsRequisitionEmployeeTime TicketIndirectMaterialIndirectLabor3-31Learning Ob
16、jectives 53-32Raw MaterialslMaterialPurchasesMfg.OverheadWork in Process(Job Cost Sheet)ActualAppliedlDirect MaterialslDirect MaterialslIndirect MaterialslIndirect MaterialsThe Purchase and Issue of Raw Materials3-33Cost Flows Material Purchases Raw material purchases are recorded in aninventory acc
17、ount.3-34Cost Flows Material Usage Direct materials issued to a job increase Work in Process and decrease Raw Materials.Indirect materials used are charged to Manufacturing Overhead and also decrease Raw Materials.3-35Mfg.OverheadSalaries and Wages PayableWork in Process(Job Cost Sheet)lDirect Mater
18、ialslDirect LaborlDirect LaborlIndirect MaterialsActualAppliedlIndirectLaborlIndirectLaborThe Recording of Labor Costs3-36The Recording of Labor Costs The cost of direct labor incurred increases Work in Process and the cost of indirect labor increases Manufacturing Overhead.3-37Mfg.OverheadSalaries
19、and Wages PayableWork in Process(Job Cost Sheet)lDirect MaterialslDirect LaborlDirect LaborlIndirect MaterialsActualAppliedlIndirectLaborlIndirectLaborRecording Actual Manufacturing OverheadlOtherOverhead3-38Recording Actual Manufacturing Overhead In addition to indirect materials and indirect labor
20、,other manufacturing overhead costs are charged to the Manufacturing Overhead account as they are incurred.3-39Learning Objective 63-40Mfg.OverheadSalaries and Wages PayableWork in Process(Job Cost Sheet)lDirect MaterialslDirect LaborlDirect LaborlIndirect MaterialsActualAppliedlIndirectLaborlIndire
21、ctLaborApplying Manufacturing OverheadlOtherOverheadlOverhead AppliedlOverheadApplied to Work inProcessIf actual and applied manufacturing overheadare not equal,a year-end adjustment is required.3-41Applying Manufacturing Overhead Work in Process is increased when Manufacturing Overhead is applied t
22、o jobs.3-42Learning Objective 63-43Finished GoodsWork in Process(Job Cost Sheet)lDirect MaterialslDirect LaborlOverhead AppliedlCost ofGoodsMfd.lCost ofGoodsMfd.Transferring Completed Units3-44Transferring Completed Units As jobs are completed,the Cost of Goods Manufactured is transferred to Finishe
23、d Goods from Work in Process.3-45Finished GoodsCost of Goods SoldWork in Process(Job Cost Sheet)lDirect MaterialslDirect LaborlOverhead AppliedlCost ofGoodsMfd.lCost ofGoodsMfd.lCost ofGoodsSold lCost ofGoodsSold Transferring Units Sold3-46Transferring Units Sold When finished goods are sold,two ent
24、ries are required:(1)to record the sale,and(2)to record COGS and reduce Finished Goods.3-47Learning Objective 83-48Problems of Overhead ApplicationThe difference between the overhead cost applied to Work in Process and the actual overhead costs of a period is referred to as either underapplied or ov
25、erapplied overhead.Underapplied overhead exists when the amount of overhead applied to jobs during the period using the predetermined overhead rate is less than the total amount of overhead actually incurred during the period.3-49Overhead Application ExampleOverhead Applied During the PeriodApplied
26、Overhead =POHR Actual Direct Labor HoursApplied Overhead =$4.00 per DLH 170,000 DLH=$680,0003-50Overhead Application ExampleOverhead Applied During the PeriodApplied Overhead =POHR Actual Direct Labor HoursApplied Overhead =$4.00 per DLH 170,000 DLH=$680,000PearCo has overappliedoverhead for the yea
27、rby$30,000.What willPearCo do?3-51 Tiger,Inc.had actual manufacturing overhead costs of$1,210,000 and a predetermined overhead rate of$4.00 per machine hour.Tiger,Inc.worked 290,000 machine hours during the period.Tigers manufacturing overhead isa.$50,000 overapplied.b.$50,000 underapplied.c.$60,000
28、 overapplied.d.$60,000 underapplied.Quick Check 3-52 Tiger,Inc.had actual manufacturing overhead costs of$1,210,000 and a predetermined overhead rate of$4.00 per machine hour.Tiger,Inc.worked 290,000 machine hours during the period.Tigers manufacturing overhead isa.$50,000 overapplied.b.$50,000 unde
29、rapplied.c.$60,000 overapplied.d.$60,000 underapplied.Quick Check Overhead Applied$4.00 per hour 290,000 hours =$1,160,000Underapplied Overhead$1,210,000-$1,160,000 =$50,0003-53Disposition of Under-or Overapplied OverheadCost of Goods SoldPearCos MethodWork inProcessFinishedGoods Cost of Goods Sold3
30、-54Disposition of Under-or Overapplied Overhead PearCosMfg.OverheadActualoverhead costs$650,000$30,000 overapplied PearCos Costof Goods SoldUnadjusted BalanceAdjustedBalance$30,000$30,000Overhead appliedto jobs$680,0003-55Allocating Under-or Overapplied Overhead Between AccountsAssume the overhead a
31、pplied in ending Work in Process Inventory,ending Finished Goods Inventory,and Cost of Goods Sold is shown below:3-56Allocating Under-or Overapplied Overhead Between AccountsWe would complete the following allocation of$30,000 overapplied overhead:3-57Allocating Under-or Overapplied Overhead Between
32、 Accounts3-58Overapplied and Underapplied Manufacturing Overhead-SummaryAlternative 1Alternative 2If ManufacturingClose to Cost Overhead is.of Goods SoldAllocationUNDERAPPLIEDINCREASEINCREASECost of Goods SoldWork in Process(Applied OH is lessFinished Goodsthan actual OH)Cost of Goods SoldOVERAPPLIE
33、DDECREASEDECREASECost of Goods SoldWork in Process(Applied OH is greaterFinished Goodsthan actual OH)Cost of Goods SoldPearCos Method3-59Quick Check What effect will the overapplied overhead have on PearCos net operating income?a.Net operating income will increase.b.Net operating income will be unaf
34、fected.c.Net operating income will decrease.3-60Quick Check What effect will the overapplied overhead have on PearCos net operating income?a.Net operating income will increase.b.Net operating income will be unaffected.c.Net operating income will decrease.3-61Homework P97 Problem 3-5wRequired:Calculate the cost of goods manufacturedCalculate the cost of goods soldCalculate the income3-62End of Chapter 3
