About This Chapter
Job Order Cost System in Accounting - Chapter Summary
Completing a job order is more than just selling a product or service to a customer. There are many aspects and additional costs involved with every job order. This chapter gives you insight into how job order cost systems allow accounting and financial professionals to monitor, predict, and verify the flow of cash involved in all orders.
Each of our lessons focuses on a single topic, making it easier for you to navigate your way through the chapter and find the lessons you need to review the most. By going through the entire chapter, you'll be prepared to do the following:
- Describe the advantages and disadvantages of job order cost systems
- Identify the manufacturing costs within the system
- Analyze the characteristics of job cost sheets
- Define work-in-process inventory accounts
- Explain the formula for the finished goods inventory
- Calculate the cost of goods
- Assess the purpose of balance sheet accounts in job order costing
- Summarize how service companies implement job order cost systems
- Relate the meaning of over- or under-applied manufacturing overhead
1. Job Order Cost System: Purpose, Pros & Cons
When a custom ordered product is manufactured, a number of costs are accumulated during the production process. In this lesson, you will learn how costs are transferred in a job order costing system.
2. Manufacturing Costs of Job Order Cost Systems
This lesson will discuss manufacturing costs in a job order costing system and demonstrate the proper recording and recognition of manufacturing and period costs through journal entries.
3. Job Cost Sheet: Purpose & Characteristics
In this lesson, we'll explore job cost sheets. We'll learn what they are and why they are used, explore their many different characteristics, and take a look at an example.
4. Work-in-Process Inventory Account: Definition & Example
The work-in-process inventory account allows companies to track the value of their inventory that is in work-in-process. Learn more about the work-in-process inventory account and its components from the example in this lesson.
5. Finished Goods Inventory: Calculation & Formula
This lesson explains what finished goods inventory is, how it is calculated, and the activities that will cause a finished goods inventory to increase or decrease. Examples to illustrate finished goods inventory are provided.
6. Cost of Goods: Definition & Calculation
It takes money to make money. In this lesson, you'll learn about the cost of goods, what it is, what it isn't and how to calculate the costs of goods sold. You'll also have a chance to reinforce your knowledge with a short quiz.
7. Balance Sheet Accounts in Job Order Costing
This lesson reviews job order costing and discusses what a balance sheet is, different accounts on the balance sheet and how to record transactions onto the balance sheet.
8. Job Order Cost System for Service Companies
This lesson discusses the assigning of costs through the job order costing system for service companies. It also illustrates the journal entries required to track these costs.
9. Under- or Over-Applied Manufacturing Overhead
This lesson discusses the application of manufacturing overhead costs and what to do if these costs are over-applied or under-applied costs. It also demonstrates how to adjust the journal entries for this process.
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Other chapters within the Accounting 303: Cost Accounting course
- Cost Classifications in Accounting
- Costing Methods & Techniques
- Formulas for Cost Accounting
- Standard Costs in Accounting
- Process Cost System in Accounting
- Activity-Based Costing Overview
- Product & Service Costing
- Budgetary Process
- Cost Behavior Analysis
- Cost-Volume-Profit Analysis Overview
- Cost Estimation
- Service Department & Joint Cost Allocation
- Cost Accounting for Decision Making
- Ethics in Cost Accounting
- Modern Trends in Accounting
- Required Assignments for Accounting 303
- Studying for Accounting 303