Job Order Costing - Chapter 15 - Wild and Shaw PDF

Job Order Costing Chapter 15 Wild and Shaw Financial and Managerial Accounting 9th Edition Copyright ©2022 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Educa...

Job Order Costing Chapter 15 Wild and Shaw Financial and Managerial Accounting 9th Edition Copyright ©2022 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.  11 - 2 Chapter 15 Learning Objectives CONCEPTUAL C1 Explain job order costing and job cost sheets. ANALYTICAL A1 Apply job order costing in pricing services. PROCEDURAL P1 Describe and record the flow of materials costs in job order costing. P2 Describe and record the flow of labor costs in job order costing. P3 Describe and record the flow of overhead costs in job order costing. P4 Close overapplied and underapplied factory overhead. © McGraw-Hill Education 15-2  Learning Objective C1 Explain job order costing and job cost sheets. © McGraw-Hill Education 15-3  19 - 4 Cost Accounting Systems Process Job Order Costing Costing Chapter 16 Exhibit 15.1 © McGraw-Hill Education 15-4 Learning Objective C1: Explain job order costing and job cost sheets.  19 - 5 Production Activities in Job Order Costing Exhibit 15.2 © McGraw-Hill Education 15-5 Learning Objective C1 Explain job order costing and job cost sheets.  Cost Flows Manufacturing costs flow: 1. Raw materials inventory – direct and indirect materials 2. Work in process inventory – job is being produced 3. Finished goods inventory – completed goods 4. Cost of goods sold – goods which are sold Subsidiary records store specific cost data about the manufacturing costs for each job. © McGraw-Hill Education 15-6 Learning Objective C1: Explain job order costing and job cost sheets.  19 - 7 Job Cost Sheet Exhibit 15.3 © McGraw-Hill Education 15-7 Learning Objective C1: Explain job order costing and job cost sheets.  Learning Objective P1 Describe and record the flow of materials costs in job order costing. © McGraw-Hill Education 15-8  Materials and Labor Costs Materials received recorded in a receiving report Receiving report – materials source document Materials ledger cards –updated when materials are purchased and issued for use in production Exhibit 15.4 Learning Objective P1: Describe and record the flow of materials costs in job order © McGraw-Hill Education 15-9 costing.  19 - 10 Materials Ledger Card Exhibit 15.5 Learning Objective P1: Describe and record the flow of materials costs in job order © McGraw-Hill Education 15-10 costing.  19 - 11 Materials Requisition Exhibit 15.6 Learning Objective P1: Describe and record the flow of materials costs in job order © McGraw-Hill Education 15-11 costing.  19 - 12 Materials Requisition Journal Entry Learning Objective P1: Describe and record the flow of materials costs in job order © McGraw-Hill Education 15-12 costing.  Learning Objective P2 Describe and record the flow of labor costs in job order costing. © McGraw-Hill Education 15-13  19 - 14 Labor Cost Flows Exhibit 15.8 Learning Objective P2: Describe and record the flow of labor costs in job © McGraw-Hill Education 15-14 order costing.  19 - 15 Labor Time Ticket Exhibit 15.9 Learning Objective P2: Describe and record the flow of labor costs in job © McGraw-Hill Education 15-15 order costing.  19 - 16 Labor Time Ticket Journal Entry Learning Objective P2: Describe and record the flow of labor costs in job © McGraw-Hill Education 15-16 order costing.  Learning Objective P3 Describe and record the flow of overhead costs in job order costing. © McGraw-Hill Education 15-17  19 - 18 Overhead Costs Exhibit 15.11 Learning Objective P3: Describe and record the flow of overhead costs in job © McGraw-Hill Education 15-18 order costing.  19 - 19 Set Predetermined Overhead Rate Road Warriors uses a predetermined overhead rate (POHR) based on direct labor cost to apply overhead to jobs. Exhibit 15.12 $200,000 160%(or 1.6times) of direct labor costs $125,000 Learning Objective P3: Describe and record the flow of overhead costs in job © McGraw-Hill Education 15-19 order costing.  19 - 20 Predetermined Overhead Rate Exhibit 15.13 Learning Objective P3: Describe and record the flow of overhead costs in job © McGraw-Hill Education 15-20 order costing.  19 - 21 Record Actual Overhead Indirect Material Indirect Labor Other Overhead Costs Learning Objective P3: Describe and record the flow of overhead costs in job © McGraw-Hill Education 15-21 order costing.  19 - 22 Record Indirect Materials Used Learning Objective P3: Describe and record the flow of overhead costs in job © McGraw-Hill Education 15-22 order costing.  19 - 23 Record Indirect Labor Used Learning Objective P3: Describe and record the flow of overhead costs in job © McGraw-Hill Education 15-23 order costing.  19 - 24 Record Other Overhead Costs Learning Objective P3: Describe and record the flow of overhead costs in job © McGraw-Hill Education 15-24 order costing.  19 - 25 Cost Flows to Financial Statements Exhibit 15.15 † Predetermined overhead rate × Actual activity base used. Learning Objective P3: Describe and record the flow of overhead costs in job © McGraw-Hill Education 15-25 order costing.  19 - 26 Accounting for Cost FlowsExhibit 15.16 Learning Objective P3: Describe and record the flow of overhead costs in job © McGraw-Hill Education 15-26 order costing.  19 - 27 Summary of Cost Flows: Journal Entries Exhibit 15.17 Learning Objective P3: Describe and record the flow of overhead costs in job © McGraw-Hill Education 15-27 order costing.  19 - 28 Schedule of Cost of Goods Manufactured Exhibit 15.18 Learning Objective P3: Describe and record the flow of overhead costs in job © McGraw-Hill Education 15-28 order costing.  19 - 29 Financial Statements Learning Objective P3: Describe and record the flow of overhead costs in job © McGraw-Hill Education 15-29 order costing.  Learning Objective P4 Close overapplied and underapplied factory overhead. © McGraw-Hill Education 15-30  19 - 31 Adjusting Factory Overhead Exhibit 15.19 Exhibit 15.20 © McGraw-Hill Education 15-31 Learning Objective P4: Close overapplied and underapplied factory overhead.  19 - 32 Adjust Underapplied or Overapplied Overhead © McGraw-Hill Education 15-32 Learning Objective P4: Close overapplied and underapplied factory overhead.  19 - 33 Job Order Costing of Services Job order costing applies to service companies. Differences for service firms: Service firms do not have raw materials or finished goods inventory. They have supplies, but these may be considered overhead. Direct labor is used to apply overhead. Typically use different account titles such as Services in Process Inventory and Services Overhead. Exhibit 15.21 © McGraw-Hill Education 15-33 Learning Objective P4: Close overapplied and underapplied factory overhead.  Learning Objective A1 Apply job order costing in pricing services. © McGraw-Hill Education 15-34  Pricing for Services Service providers also use job order costing. Cost for each individual job are tracked separately. Total costs include labor and overhead. © McGraw-Hill Education 15-35 Learning Objective A1: Apply job order costing in pricing services.  Gross Profit Ratio for Service Companies Service providers also use job order costing. Cost for each individual job are tracked separately. Total costs include labor and overhead. © McGraw-Hill Education 15-36 Learning Objective A1: Apply job order costing in pricing services.  19 - 37 End of Chapter 15 © McGraw-Hill Education 15-37