Académique Documents
Professionnel Documents
Culture Documents
Track resources
Manage activities
consumed by
that consume
products and
resources
services
17-3
Job Order Costing
Used for production of large,
unique, high-cost items.
Built to order rather than mass
produced.
Many costs can be directly traced
to each job.
THE JOB
c t l y
d i re
c e d b
Tr a j o
Direct e ach
to
labor
17-5
Job Order Cost Systems
and the Creation of Goods
and ServicesCharge direct material and
direct labor costs to each
job as work is performed.
Direct
DirectMaterials
Materials
Job
Job No.
No. 11
Direct
DirectLabor
Labor Job
Job No.
No. 22
Manufacturing
Manufacturing Job
Job No.
No. 33
Overhead
Overhead
Apply overhead to each job
using a predetermined rate.
17-6
Overhead Application
Rates
The predetermined overhead rate
(POHR) used to apply overhead to
jobs is determined before the period
begins.
Estimated total manufacturing
overhead cost for the coming period
POHR =
Estimated total units in the
activity base for the coming period
17-7
Overhead Application
Rates
Based on estimates,
and determined before
the period begins.
17-8
Flow of Costs in Job
Costing
Direct Job Cost
A materials Material Job Cost
Job Cost
Sheets
Job Cost
requisition Sheets
Sheets
indicates the Sheets
cost of direct Materials
Material
Requisitioin
material Materials
Requisitioin
to charge to Materials
Requisitioni
jobs Requisition
and the cost of Manufacturing
indirect material Overhead
to charge to Indirect Account
overhead. Material
17-9
Flow of Costs in Job
Costing
Direct Job Cost
Employee time Labor Job Cost
Job Cost
Sheets
tickets indicate Job Cost
Sheets
Sheets
the cost of Sheets
direct labor Employee Time
Employee Time
Ticket
to charge to Employee Time
Ticket
Employee Time
jobs Ticket
and the cost Ticket
of indirect Manufacturing
labor to charge Overhead
to overhead. Indirect Account
Labor
17-10
Flow of Costs in Job
Costing
Employee Indirect
Time Labor
Ticket
Overhead
Other Manufacturing
Applied Job Cost
Actual OH Overhead
with Sheets
Charges Account
POHR
Materials Indirect
Requisition Material
17-11
Over- or Under applied
Overhead
UNDERAPPLIED INCREASE
(Applied OH is less Cost of Goods Sold
than actual OH)
OVERAPPLIED DECREASE
(Applied OH is greater Cost of Goods Sold
than actual OH)
17-12
Activity-Based Costing
(ABC) Activity-Based Costing
Departmental
Overhead Rates i ty
l ex
p
o m
C f
Plantwide l o
v e
Overhead Rate Le
Overhead Allocation
17-15
Activity-Based Costing
Procedures
Identify activities that consume resources.
Assign costs to a cost pool for each
activity.
Identify cost drivers associated with each
activity.
Compute overhead rate for each cost pool:
Estimated overhead costs in activity cost pool
Rate =
Estimated number of activity units
Assign costs to products:
Overhead Actual
×
Rate Activity
17-16
End of Chapter 17
17-17