About This Chapter
Job-Order Costing & Process Costing - Chapter Summary and Learning Objectives
If an organization prints books on-demand, for example, its cost per job will change based on the size of each job. Organizations need to make money no matter the size of the jobs they run, so they perform job-order costing and process costing calculations to help them determine what they should charge consumers. In this chapter, the instructors have developed several lessons to teach you the finer points about determining the cost of jobs and orders. After finishing this chapter, you should have a deeper comprehension of the following:
- How to review income and inventory statements to determine costs
- The various types of costs and how they affect costing systems
- The uses and relationships between different costing methods
- Figuring out cash flows and the flow of costs
|Absorption Costing: Income Statement & Marginal Costing||Point out the differences between marginal costing and absorption costing, and show the relationship between income statement preparation and absorption costing.|
|Job-Order Costing System Processes||Define and show the connection between the following: direct labor costs, calculating direct material costs, job sheet calculations of per-unit costs, predetermined overhead rate within an allocation base, and manufacturing overhead (MOH).|
|Flow of Costs without Journal Entries||Explain how to measure the flow of costs in scenarios where journal entries are not present.|
|Cost Classifications on Goods & Inventory Statements||Describe the following: schedule of cost of goods manufactured, inventory accounts listed on the balance sheet, and the cost of goods sold noted on the income statement.|
|Inventory Cost: Definition, Methods & Types||Analyze ownership of inventory, review the three different types of inventory costs, describe the cost of goods sold, and explain the ending inventory.|
|Issues of Overhead Application without Journal Entries||Interpret the issues of under-applied and oversupplied overhead, and determine how a disposition of overhead to inventory may affect the cost of goods sold.|
|Job-Order Costing in a Service Company||Define a service company and identify how job-order costing can impact the flow of goods.|
|Comparing Job-Order & Process Costing||Describe each costing methodology and point out how they differ from each other.|
|Cash Flows in Process Costing without Journal Entries||Extrapolate how processing departments would figure out process costing and cost accumulation if they do not have access to journal entries.|
|The Weighted-Average Method of Equivalent Units of Production||Apply this methodology to make calculations for the cost of per equivalent unit, conversion, and materials; take those calculations to analyze which goods have been transferred out of the inventory; and, show how to include this method as you run cost reconciliation reports.|
1. Absorption Costing: Income Statement & Marginal Costing
Costs to manufacture a product include direct materials, direct labor and overhead. In this lesson, you'll learn how overhead is allocated to finished products using absorption and marginal costing.
2. Job-Order Costing System Processes
In a job-order costing system, the product being manufactured is unique, and its costs can be separately identified and tracked. In this lesson, you'll learn how costs are tracked.
3. Flow of Costs without Journal Entries
As an item is manufactured, it moves through different stages during its conversion from raw materials to finished goods. In this lesson, you will learn about the flow of costs for manufactured goods.
4. Cost Classifications on Goods & Inventory Statements
Manufacturing companies convert raw materials into finished goods that are sold to consumers. Inventory in various stages of completion must be reported on company financial statements.
5. Inventory Cost: Definition, Methods & Types
Have you ever thought about how much it costs a business to keep inventory in stock? It's not just the price the business pays for the items that it keeps in stock. It is so much more. In this lesson, we will discuss exactly what constitutes actual inventory cost.
6. Issues of Overhead Application without Journal Entries
Manufacturing a product requires materials, labor and manufacturing overhead. In this lesson, you'll learn how manufacturing overhead is calculated and allocated.
7. 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.
8. Comparing Job-Order & Process Costing
A manufacturing company must accumulate costs from three categories when determining the final inventory cost, which could be calculated using a job-order or process costing method. Learn more about these costing methods in this lesson.
9. Cash Flows in Process Costing without Journal Entries
Read this lesson to learn how production costs are added to a product as it is being made. You'll also see why it's important for a business to know how cash flow relates to process costing.
10. The Weighted-Average Method of Equivalent Units of Production
Have a bunch of units that are only half-finished at the end of the accounting period? Then chances are you're going to want to know more about the weighted-average method of finding equivalent units of production.
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Other chapters within the Accounting 102: Intro to Managerial Accounting course
- Overview of Managerial Accounting
- Cost Types
- Cost Behavior Analysis & Cost-Volume Profit
- Basics of Activity-Based Costing
- Budgeting & Standard Costs
- Reporting Systems & Structures in Accounting
- Short & Long-Term Decision-Making in Accounting
- Basics of Financial Statement Analysis
- Studying for Accounting 102