Topic 4 Chapter 3 - Accountant Product Costing Notes

topic 4: chpt 3 product coating is the assignment of production coats to all output of the organization whether items manufactured. goods merchandised (maid), or services delivered product casting syrion gocumulates the coats incume ina production prooms and assigns those coats to the organizations outputs Why Service companies te cut information for planning and control purposes is true Dupport the catspringvari ploring contr servis purp ha provide athle types of product-coating systona job-order costing.com] - used by comparies with job-shop ar betch-production manufacturing proces products are manufactured in very low vilume of one afatis process casting stahle manufattaren) accumulates all the production costs for a large nunter unite at output,& then these casts an averaged over all of the units used by companiss that jemouce large numbers of identical unite in a Flow manufacturing process cοπτιημαίας To keep track of the manufacturing costis assigned to each job, a subsidiary ledger it maintained, the subsidiary ledger account assigned to each job is a document called a jeh-cort record A typical job-cost record would previde information about the cost of direct maternals used, dunct later costs incurred, appired manufacturing overread & dired izbor hours worked material requisition form is used by the production department supervisor so as to allow the row-materals storage supervisor to authorize the materials. toverce document supply chain flow of all goods, services, and Information into and out of the organization. supply chain management proachviny working wim some or all of the organizations и в сотру Supply chan to improve serve and to manage or reduce corts material requirements planning for products and product components theh are prodiind routinely, the required for these producte components, material requisitions are based on a bill of materiala thar lats all of the matenais needed pendant costing in a manufacturing firm is the process o cangning costs to the firm's inventory the need for product cothing is not limited to manufacturing Firm merchandising companies indiade the coats of trang transporting merchandise in their producd coats non-manufacturing producers of inventoriable goods, such as those in mining, oil and gus, and agnoutthere, also record the costs of producing that goods why although services carvet be stored as inventory soldater like manufacturing goods, these organzamena till dermation about the caste of producing Serviest the assignment of direct-later coats is jobe is based on time reconds completed by production comployees fime record form that records the amount of time an employse spends on each production recond manufacturing overread coats it a reatively amais to trace dm & di coats to production jobs, but manufacturing overhead is not easily traced to yht this measure is usually some vislume-brand cost driver ochvily boan, tuch os direct-labor hount, direct-labor cost, or machine hours volume-based fact that the cast driver chosen is sometting that will assign coats in roughly in proportion to the amount of products produced produchon takes place, ali manufacturing costs are added to the WIP inventory alc not credited when goods are ald underappand overtred amount by which chadvertend exceeds applied OH overopplied over head achial OM has been team than applied он estimated moh $600.000 estimated d. cost: $480,000 determine the pohe poke $600,000 $480,000 25 of dired labor cast pane budgeted moh costs budgeted amount of cast driver ३१११,500 15,000 hrs 13.30 per he 2 231,000 Bepreciatins 21.000 Indirect la 82,000 Supervisory salaries 59,000 Rental of speer Indirect material: Beginning inventory, January 1 $18,000 Add: Purchases 94,000 Indireet material available for use $142,000 Dedner: Ending inventory, Becember 41.000 Indinuct matt Actual manufacturing weerbead averapplied overticaid achus manufacturing Oti-applied manufacturing OH $1,003,000-($1330 x 80,000) 3,000 3. manufacturing overhead 3,000 cast of goods soid 60,000