JOB-ORDER-COST-ACCOUNTIN课件

1、Chapter 19JOB ORDER COST ACCOUNTINGProcessCostingJobCosting Used for production of large, unique, or high-cost items. Built to order rather than mass produced. Many costs can be directly traced to each job.COST ACCOUNTING SYSTEMS Chapter 20C 1ProcessCostingJobCosting Typical job order cost applicati

2、ons: Special-order printing Building construction Also used in service industry Hospitals Law firms Chapter 20JOB ORDER PRODUCTIONC 1Receive order from customer.Predict cost to complete job.Negotiate a sales price and decide whether to pursue the job.Schedule production of the job.EVENTS IN JOB ORDE

3、R COSTINGC 1 Goods in ProcessCost of GoodsSoldLaborMaterialsIndirectIndirectFinishedGoodsFactoryOverheadDirectDirectAllocate JOB ORDER PRODUCTION ACTIVITIESC 1JOB ORDER COST DOCUMENTSThe primary document for tracking the costs associated with a given job is the job cost sheet.Lets investigateC 2JOB

4、COST SHEETC 2JOB COST SHEETLets see oneA materials requisition is used to authorize the use of materials on a job.C 2MATERIALS REQUISITIONC. LutherM. BatemanC. LutherP 1C. LutherM. BatemanC. LutherMATERIALS REQUISITIONProperauthorizationCost of material is charged to Job B15.P 1C. LutherM. BatemanC.

5、 LutherMATERIALS REQUISITIONType and quantity of material charged to Job B15.Pre-printed, sequentially numbered formP 1C. LutherM. BatemanC. LutherMATERIALS REQUISITIONThe materials requisition form also serves as the source document for recording material usage in the accounting records. P 1MATERIA

6、LS LEDGER CARDP 1JOB COST SHEETP 1JOB COST SHEETAccumulate direct labor costs by means of a work record, such as a time ticket, for each employee.Lets see oneP 2LABOR TIME TICKETC. LutherP 2JOB COST SHEETP 2JOB COST SHEETAllocate manufacturing overhead to jobs using a predetermined overhead rateLets

7、 do itP 3JOB COST SHEETP 3 Road Warriors uses a predetermined overhead rate (POHR) based on direct labor cost to apply overhead to jobs.Estimated total manufacturingoverhead cost for the coming periodEstimated total direct labor costsfor the coming periodPOHR =POHR = = 160% of direct labor $200,000$

8、125,000PREDETERMINED OVERHEAD RATEP 3JOB ORDER COST FLOWS AND REPORTSLets summarize the document flow we have been discussing in a job-order costing system. Materials Ledger CardsMaterials Ledger CardsMaterials Ledger CardsMaterialsRequisitionDirect materialsThe materials requisition indicates the c

9、ost of direct materialsto charge tojobsand the cost of indirect materials to charge to overhead.Indirect materialsJob Cost SheetsJob Cost SheetsJob Cost SheetsJob Cost SheetsFactory Overhead AccountMaterial Cost Flows and DocumentsP 1Employee time tickets indicate the cost of direct laborto charge t

10、ojobsand the cost of indirect labor to charge to overhead.Job Cost SheetsFactory Overhead AccountJob Cost SheetsJob Cost SheetsJob Cost SheetsDirect LaborIndirect LaborEmployee Time TicketEmployee Time TicketEmployee Time TicketEmployee Time TicketLabor Cost Flows and DocumentsP 2Summary of Cost Flo

11、wsLets examine the cost flows in a job order system.We will useT-accounts and start with materials.MaterialPurchasesDirectMaterialDirectMaterialActualOverheadCostsIndirect Material Dr Cr Dr Cr Dr CrSummary of Cost FlowsP 1IncurredDirectMaterial Actual Applied factory factoryoverhead overhead=/an adj

12、ustment is needed. We will look at how to accomplish this later.WhenDirectLaborDirectLaborIndirect Labor ActualOverheadCostsOverheadOverheadApplied to Work inProcess Dr Cr Dr Cr Dr CrSummary of Cost FlowsP 2P 3DirectMaterialDirectLaborOverheadCost ofGoodsMfd. Cost ofGoodsMfd. Cost ofGoodsSold Cost o

13、fGoodsSold Dr Cr Dr Cr Dr CrSummary of Cost FlowsP 3We multiply the POHRtimes the number ofactivity units (direct labor cost for Road Warriors)incurred for the job.Tell me again how we use the POHR to assign overhead to jobs.OVERHEAD APPLICATIONP 4OVERHEAD APPLICATIONOverhead is notincurred uniforml

14、yduring the year.Actual overhead ratemight vary from month to month.Predetermined ratemakes it possible toestimate job costs sooner.Reasons for using a POHR(predetermined overhead rate)P 4The result will be either underapplied or overappliedoverhead and wewill adjust Cost of Goods Sold at the end of

15、 the period.Here, let me show you.The POHR is basedon estimates.What happens ifactual results differfrom the estimates?ADJUSTMENT OF OVERAPPLIED OR UNDERAPPLIED OVERHEADP 4Overhead is overapplied.Overheadapplied toWork in Process(POHR Activity)ActualoverheadcostsincurredADJUSTMENT OF OVERAPPLIED OR

16、UNDERAPPLIED OVERHEADP 4Overhead is underapplied.ActualoverheadcostsincurredOverheadapplied toWork in Process(POHR Activity)ADJUSTMENT OF OVERAPPLIED OR UNDERAPPLIED OVERHEADP 4Adjusting Cost of Goods Sold for underapplied or overapplied overheadADJUSTMENT OF OVERAPPLIED OR UNDERAPPLIED OVERHEADP 4G

17、LOBAL VIEWExpensive European sports cars are often built according to individual customer specifications. Customers place orders for their dream cars, and then each car is built to order and shipped to the customer.PRICING FOR SERVICESPricing for services is based on direct labor. Any material costs

18、 are usually incidental and are a part of overhead.Acme Consulting prepared the following bid for a jobthat will require a total of 1,000 hours of direct labor.A 1Lets look at summary accounting journal entries for the job order cost system at Road Warriors. The dollar amounts are from Exhibit 19.12

19、 in your textbook.ENTRIES FOR JOB ORDERPRODUCTION COSTSENTRIES FOR JOB ORDERPRODUCTION COSTSP 1ENTRIES FOR JOB ORDERPRODUCTION COSTSP 1P 2ENTRIES FOR JOB ORDERPRODUCTION COSTSP 2ENTRIES FOR JOB ORDERPRODUCTION COSTSP 3ENTRIES FOR JOB ORDERPRODUCTION COSTSP 3END OF CHAPTER 19Chapter 21COST ALLOCATION

20、 AND PERFORMANCE MEASUREMENTALLOCATING COSTS FORPRODUCT COSTING One of the most difficult tasks in computing accurate unit costs lies in determining the proper amount of overhead cost to assign to each job.Assigningoverhead isdifficult.I agree! Jobs Direct Labor HoursMachineHoursRawMaterialsCostDepa

21、rtmental Allocation BasesStage Two:Costs appliedto jobsStage One:Costs assignedto departmentsTWO-STAGE COST ALLOCATIONServiceDept. 2ServiceDept. 3ServiceDept. 1OperatingDept.1OperatingDept. 2OperatingDept. 3P 1ILLUSTRATION OF TWO-STAGECOST ALLOCATIONFirst, determine the unit cost of each model using

22、 traditional costing methods.Ames Company manufactures hammers in regular and deluxe models. Overhead is assigned on the basis of direct labor hours. Budgeted overhead for the currentyear is $2,000,000. Other information includes:P 1Overhead Estimated overhead costs Rate Estimated activity =Overhead

23、 $2,000,000 Rate 40,000 DLH= $50 per DLH P 1ILLUSTRATION OF TWO-STAGECOST ALLOCATIONP 1ILLUSTRATION OF TWO-STAGECOST ALLOCATIONABC will result in differentoverhead cost per unit.With the Activity-BasedCosting (ABC) method, we recognize that many activities within a department drive overhead costs.AB

24、CACBACTIVITY-BASED COST ALLOCATIONIdentify activities and assign indirect costs to those activities.Central idea . . .Products require activities.Activities consume resources.P 2More detailed measures of costs.Better understanding of activities.More accurate product costs for . . .Pricing decisions.

25、Product elimination decisions.Managing activities that cause costs.Benefits should always be comparedto costs of implementation.ACTIVITY-BASED COSTING BENEFITSP 2ACTIVITY-BASED COSTING STEPS Identify activities that consume resources. Assign costs to a cost pool for each activity. Identify cost driv

26、ers associated with each activity. Compute overhead rate for each cost pool: Assign costs to products: Overhead Actual Rate ActivityRate = Estimated overhead costs in activity cost pool Estimated number of activity units P 2Ames Company plans to adopt activity-based costing. Using the following acti

27、vity center data, determine the unit cost of the two products using activity-based costing.P 2ILLUSTRATION OF ACTIVITY-BASED COSTINGTotal units of activity for both products.P 2ILLUSTRATION OF ACTIVITY-BASED COSTINGTotal overhead = $720,000 + $1,280,000 = $2,000,000Recall that $2,000,000 was the ori

28、ginal amount of overhead assigned to the products using traditional overhead costing.P 2ILLUSTRATION OF ACTIVITY-BASED COSTINGP 2ILLUSTRATION OF ACTIVITY-BASED COSTINGThis result is not uncommon when activity-based costing is used. Many companies have found that low-volume, specialized products have

29、 greater overhead costs than previously realized.COMPARISON OF TWO-STAGE AND ABC ALLOCATIONP 2Provide informationfor managers to usein performanceevaluation.Assign costs tomanagers who areresponsible forcontrolling the costs.PrimarygoalsDEPARTMENTAL ACCOUNTINGC 1 Large complex businesses are divided

30、 into departments enabling managers to have a smaller effective span of control.MOTIVATION FORDEPARTMENTALIZATIONProductionSalesServiceDepartments are established for specialized functions.C 1DEPARTMENTAL EVALUATION The accounting system provides information about resources used and outputs achieved

31、. Managers use this information to control operations, appraise performance, allocate resources, and plan strategy. The type of accounting information provided depends on whether the department is a . . .Evaluated on ability tocontrol costs.CostcenterEvaluated on abilityto generate revenuesin excess

32、 of expenses. ProfitcenterEvaluated on abilityto generate return on investment in assets. InvestmentcenterC 1 Direct expenses are incurred for the sole benefit of a specific department. Indirect expenses benefit more than one department and are allocated among departments benefited.DEPARTMENTAL EXPE

33、NSE ALLOCATIONC 1ILLUSTRATION OF INDIRECTEXPENSE ALLOCATION Classic Jewelry pays its janitorial service $300 per month to clean its store. Management allocates this cost to its three departments according to the floor space each occupies.C 1ALLOCATION OF INDIRECT EXPENSESIndirect expenses can be all

34、ocated to departmentsusing a number of allocation bases. Some common indirectexpenses and their allocation bases are:C 1 Service department costs are shared, indirect expenses that support the activities of two or more production departments.SERVICE DEPARTMENT EXPENSESC 1DEPARTMENTAL INCOME STATEMEN

35、TSP 3Lets prepare departmental income statements using the following steps: Direct expense accumulation. Indirect expense allocation. Service department expense allocation.Service Dept. OneService Dept. TwoDirect expenses are traced to eachdepartment without allocation.STEP 1: DIRECT EXPENSEACCUMULA

36、TIONP 3Operating Dept. OneOperating Dept. TwoIndirect expenses are allocated to all departmentsusing appropriate allocation bases. AllocationAllocationAllocationAllocationSTEP 2: INDIRECTEXPENSE ALLOCATIONP 3Operating Dept. OneOperating Dept. TwoService Dept. OneService Dept. TwoOperating Dept. OneO

37、perating Dept. TwoService department total expenses (original direct expenses + allocated indirect expenses) areallocated to operating departments. AllocationAllocationSTEP 3: SERVICE DEPARTMENT EXPENSE ALLOCATIONP 3Service Dept. OneService Dept. TwoDEPARTMENTAL EXPENSEALLOCATION SPREADSHEETStep 1:

38、Direct expenses are traced to service departments and sales departments without allocation.P 3DEPARTMENTAL EXPENSEALLOCATION SPREADSHEETStep 2: Indirect expenses are allocated to both the service and the sales departments based on floor space occupied. Of a total of 2,000 square feet, the service de

39、partments occupy 200 square feet each, sales department one occupies 600 square feet, and sales department two occupies 1,000 square feet. P 3Sales department one has $40,000 in sales and sales department two has $48,000 in sales. Step 3: Service department total expenses (original direct expenses +

40、 allocated indirect expenses) are allocated to sales departments. DEPARTMENTAL EXPENSEALLOCATION SPREADSHEETP 3DEPARTMENTAL EXPENSEALLOCATION SPREADSHEETSales department one has 28 employees and sales department two has 40 employees. Step 3: Service department total expenses (original direct expense

41、s + allocated indirect expenses) are allocated to sales departments. P 3DEPARTMENTALINCOME STATEMENTSP 3 Departmental contribution . . . Is used to evaluate departmental performance.Is not a function of arbitrary allocations of indirect expenses. Departmental revenue Direct expenses = Departmental c

42、ontributionDEPARTMENTAL CONTRIBUTIONTO OVERHEADA department may be a candidate for elimination when its departmental contribution is negative.P 3DEPARTMENTAL CONTRIBUTIONTO OVERHEADNet income for the company is still $17,500.P 3INVESTMENT CENTER RETURNON TOTAL ASSETS (ROI)ROI = Investment Center Net

43、 IncomeInvestment Center Average Invested AssetsLCD Division earned more dollars of income, but it was lessefficient in using its assets to generate income comparedto S-Phone Division.A 1ResidualIncomeInvestment CenterNet IncomeTarget InvestmentCenter Net Income=INVESTMENT CENTERRESIDUAL INCOME The

44、target net income is 8% of divisional assets.A 1Innovation and LearningHow can we continuallyimprove and create value?Internal Business ProcessesIn which activities must we excel?BALANCED SCORECARDPerformance MeasuresFinancial PerspectiveHow do we lookto the firms owners?Customer PerspectiveHow do o

45、ur customers see us?A 1CONTROLLABLE VERSUSDIRECT COSTSCosts are controllable if the manager has the power to determine, or strongly influence, the amounts incurred. A managers performance evaluation should be based on controllable costs.Direct costs are traced to departments, but may not be controll

46、able by the department manager. Example: Department managers usuallyhave no control over their own salaries.C 2An accounting system thatprovides information . . . RESPONSIBILITY ACCOUNTING SYSTEMRelating to theresponsibilities ofindividual managers.To evaluatemanagers oncontrollable items.C 2Respons

47、ibility Accounting Successful implementation of responsibility accounting may use organization charts with clear lines of authority and clearly defined levels of responsibility.C 2Amount of detail varies according to the level in the organization.A department manager receives detailed reports.A stor

48、e manager receives summarized information from each department.RESPONSIBILITY ACCOUNTINGPERFORMANCE REPORTSC 2 To be of maximum benefit, responsibility reports should . . .Be timely.Be issued regularly.Be understandable.Compare budgetedand actual amounts.RESPONSIBILITY ACCOUNTINGPERFORMANCE REPORTSC

49、 2GLOBAL VIEWLOreal is an international cosmetics company incorporated in France. With multiple brands and operations in over 100 countries, the company uses concepts of departmental accounting and controllable costs to evaluate performance. A recent annual report shows the following for the major divisions in LOreals Cosmetics branch:LOreals non-allocated costs include costs that are not controllable by division managers. Excluding noncontrollable costs enables LOreal to prepare more meaningful division performance evaluations.INVESTMENT CENTER PROFIT MARGINAND INVESTME