University:
Grand Rapids Community College
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

473

Pages:

2
Author:

stud_ice13

Key Adaptations of Job Order Costing for Service Companies: 1. Inventory Differences: o Unlike manufacturing firms, service companies generally lack raw materials and finished goods inventory. However, they may have a Services in Process Inventory and a supply inventory. o Supplies are typically considered overhead due to their immaterial cost impact in service operations. 2. Application of Overhead: o Direct labor serves as the primary base for applying overhead, reflecting the labor-intensive nature of most service work. o Overhead and job-specific costs are recorded in Services in Process Inventory, then transferred to Cost of Services Provided upon job completion. 3. Specialized Account Titles: o Account titles are modified for service-specific contexts, using terms like Services in Process Inventory and Services Overhead instead of traditional inventory or production-related terminology. 4. Example - AdWorld's Cost Flow: o For a company like AdWorld, which provides customized advertising campaigns across platforms (e.g., mobile, television, radio), costs flow from Services in Process Inventory (for ongoing projects) to Cost of Services Provided once campaigns are completed. Additional Industry Practices and Considerations: • Healthcare Example: Health providers use data analytics and electronic records to improve patient care while controlling costs. Risk scores from patient data guide personalized care plans, enhancing service quality and cost efficiency. Diversity and Workforce Talent: • Professional firms in fields such as accounting, law, and consulting emphasize recruiting and retaining a diverse workforce, which is linked to increased innovation and improved service quality. o The Sustainability Accounting Standards Board (SASB) provides guidelines for reporting workforce diversity metrics, which include gender and ethnicity data, especially for senior management and overall staff. o For instance, USPS discloses its diversity metrics, reporting that women and minorities each make up about 40% of its workforce, which reflects its commitment to inclusivity. Corporate Social Responsibility (CSR): • o o An example of CSR in manufacturing is Wallace Detroit Guitars, which uses reclaimed wood from non-profit sources, fostering both environmental sustainability and local employment opportunities. This approach aligns with broader societal and ethical commitments beyond mere profit.