Professional Documents
Culture Documents
Job Order
Costing
Job
order A job order costing
costing system is an
system Unique accounting system
products
that accumulates
costs by job.
Costs
accumulated A job is the
by job production of a
unique product or
specialized service.
May be one unit or a
batch of units.
© 2016 Pearson Education Ltd. 19-5
Process Costing
A process costing
Process
costing system is an
system Identical accounting system
units that accumulates
costs by process. It
Costs is used when
accumulated companies
by process
manufacture
identical units.
• Purchasing materials:
– Often stored for later usage.
• Using materials in production:
– Direct materials
– Indirect materials
• Note: Materials purchased and materials
used in production are usually different
amounts.
A materials
requisition
is a request
to transfer
materials to
the
production
floor.
Most companies
use electronic
labor/time to
track labor costs.
If a manual
system is used,
each employee
completes a
labor time
record to track
and assign direct
labor to jobs.
Calculate the
predetermined overhead
allocation rate and
allocate overhead costs
19-39
Learning Objective 6