Strategies for Unlocking Knowledge Management in Microsoft 365 in the Copilot...
Job Order Slides CMA
1. Manufacturing Companies
There are 3 major categories of manufacturing
costs:
There are 3 major categories of manufacturing
costs:
Direct Materials
Raw material,
parts, and
components that
can be observed
being used to make
a specific product.
Direct Materials
Raw material,
parts, and
components that
can be observed
being used to make
a specific product.
Direct Labor
The cost of
paying
employees who
convert direct
materials into
finished product.
Direct Labor
The cost of
paying
employees who
convert direct
materials into
finished product.
Manufacturing
Overhead
Manufacturing
Overhead
Indirect materialIndirect material
Indirect laborIndirect labor
Other overheadOther overhead
2. Manufacturing Companies
Prime Costs include:Prime Costs include:
Direct MaterialsDirect Materials Direct LaborDirect Labor Manufacturing
Overhead
Manufacturing
Overhead
3. Manufacturing Companies
Conversion Costs include:Conversion Costs include:
Direct MaterialsDirect Materials Direct LaborDirect Labor Manufacturing
Overhead
Manufacturing
Overhead
Nonmanufacturing Costs are all the costs not
used to produce products.
Nonmanufacturing Costs are all the costs not
used to produce products.
5. Stages of Production and the
Flow of Costs - Example
What is EndingWhat is Ending
Inventory inInventory in
February?February?
What is EndingWhat is Ending
Inventory inInventory in
February?February?
Axel Electronics makes toasters. OnAxel Electronics makes toasters. On
February 1, Axel has $15,000 of rawFebruary 1, Axel has $15,000 of raw
material on hand. Axel’s purchasematerial on hand. Axel’s purchase
and transfers to the production floorand transfers to the production floor
are indicated below.are indicated below.
Axel Electronics makes toasters. OnAxel Electronics makes toasters. On
February 1, Axel has $15,000 of rawFebruary 1, Axel has $15,000 of raw
material on hand. Axel’s purchasematerial on hand. Axel’s purchase
and transfers to the production floorand transfers to the production floor
are indicated below.are indicated below.
6. Axel Electronics makes toasters. OnAxel Electronics makes toasters. On
February 1, Axel has $15,000 of rawFebruary 1, Axel has $15,000 of raw
material on hand. Axel’s purchasematerial on hand. Axel’s purchase
and transfers to the production floorand transfers to the production floor
are indicated below.are indicated below.
Axel Electronics makes toasters. OnAxel Electronics makes toasters. On
February 1, Axel has $15,000 of rawFebruary 1, Axel has $15,000 of raw
material on hand. Axel’s purchasematerial on hand. Axel’s purchase
and transfers to the production floorand transfers to the production floor
are indicated below.are indicated below.
Stages of Production and the
Flow of Costs - Example
Now let’s look atNow let’s look at
Work-in-Process.Work-in-Process.
Now let’s look atNow let’s look at
Work-in-Process.Work-in-Process.
7. Stages of Production and the
Flow of Costs - Example
What is theWhat is the
amount of costamount of cost
transferred totransferred to
Finished Goods inFinished Goods in
February?February?
What is theWhat is the
amount of costamount of cost
transferred totransferred to
Finished Goods inFinished Goods in
February?February?
On February 1, Axel
had WIP of $30,000
on the factory floor.
During February,
Axel paid $92,000 in
direct labor wages.
Overhead is applied
at 150% of direct
labor. On 2/28,
$22,000 is still in
WIP.
On February 1, Axel
had WIP of $30,000
on the factory floor.
During February,
Axel paid $92,000 in
direct labor wages.
Overhead is applied
at 150% of direct
labor. On 2/28,
$22,000 is still in
WIP.
8. Stages of Production and the
Flow of Costs - Example
On February 1, Axel
had WIP of $30,000
on the factory floor.
During February,
Axel paid $92,000 in
direct labor wages.
Overhead is applied
at 150% of direct
labor. On 2/28,
$22,000 is still in
WIP.
On February 1, Axel
had WIP of $30,000
on the factory floor.
During February,
Axel paid $92,000 in
direct labor wages.
Overhead is applied
at 150% of direct
labor. On 2/28,
$22,000 is still in
WIP.
Now let’sNow let’s
look atlook at
FinishedFinished
Goods.Goods.
Now let’sNow let’s
look atlook at
FinishedFinished
Goods.Goods.
TransferredTransferred
to Finishedto Finished
GoodsGoods
9. Stages of Production and the
Flow of Costs - Example
On February 1, Axel had Finished Goods of $125,000 on hand.
At the end of February, a physical inventory count revealed
$96,000 in Finished Goods still on hand.
What was Cost of Goods Sold for February?
On February 1, Axel had Finished Goods of $125,000 on hand.
At the end of February, a physical inventory count revealed
$96,000 in Finished Goods still on hand.
What was Cost of Goods Sold for February?
10. Stages of Production and the
Flow of Costs - Example
On February 1, Axel had Finished Goods of $125,000 on hand.
At the end of February, a physical inventory count revealed
$96,000 in Finished Goods still on hand.
What was Cost of Goods Sold for February?
On February 1, Axel had Finished Goods of $125,000 on hand.
At the end of February, a physical inventory count revealed
$96,000 in Finished Goods still on hand.
What was Cost of Goods Sold for February?
11. Process
Costing
Job Order
Costing
Used for production of large,
unique, high-cost items.
Built to order rather than mass
produced.
Many costs can be directly traced
to each job.
Basic Cost Accounting
Procedures
12. Typical job order cost
applications:
Special-order printing
Building construction
Also used in service industry
Hospitals
Law firms
Basic Cost Accounting
Procedures
Process
Costing
Job Order
Costing
13. Used for production of small,
identical, low-cost items.
Mass produced in automated
continuous production process.
Costs cannot be directly traced to
each unit of product.
Basic Cost Accounting
Procedures
Process
Costing
Job Order
Costing
14. Typical process cost applications:
Petrochemical refinery
Paint manufacturer
Paper mill
Basic Cost Accounting
Procedures
Process
Costing
Job Order
Costing
16. The primary document for
tracking the costs
associated with a given
job is the job cost sheet.
Let’s investigate
Job Order Costing
17. The Job Cost Sheet
RoseCo Job Cost Sheet
Job Number A - 143 Date Initiated 3-4-X9
Date Completed
Department B3 Units Completed
Item Wooden cargo crate
Direct Materials Direct Labor Manufacturing Overhead
Req. No. Amount Ticket Hours Amount Hours Rate Amount
Cost Summary Units Shipped
Direct Materials Date Number Balance
Direct Labor
Manufacturing Overhead
Total Cost
Unit Cost
18. The Job Cost Sheet
RoseCo Job Cost Sheet
Job Number A - 143 Date Initiated 3-4-X9
Date Completed
Department B3 Units Completed
Item Wooden cargo crate
Direct Materials Direct Labor Manufacturing Overhead
Req. No. Amount Ticket Hours Amount Hours Rate Amount
X7-6890 116$
Cost Summary Units Shipped
Direct Materials 116$ Date Number Balance
Direct Labor
Manufacturing Overhead
Total Cost
Unit Cost
19. The Job Cost Sheet
RoseCo Job Cost Sheet
Job Number A - 143 Date Initiated 3-4-X9
Date Completed
Department B3 Units Completed
Item Wooden cargo crate
Direct Materials Direct Labor Manufacturing Overhead
Req. No. Amount Ticket Hours Amount Hours Rate Amount
X7-6890 116$ 36 8 88$
Cost Summary Units Shipped
Direct Materials 116$ Date Number Balance
Direct Labor 88$
Manufacturing Overhead
Total Cost
Unit Cost
Accumulate
direct labor
costs by
means of a
work record,
such as a time
ticket, for each
employee.
20. The Job Cost Sheet
RoseCo Job Cost Sheet
Job Number A - 143 Date Initiated 3-4-X9
Date Completed 3-5-X9
Department B3 Units Completed 2
Item Wooden cargo crate
Direct Materials Direct Labor Manufacturing Overhead
Req. No. Amount Ticket Hours Amount Hours Rate Amount
X7-6890 116$ 36 8 88$ 8 4$ 32$
Cost Summary Units Shipped
Direct Materials 116$ Date Number Balance
Direct Labor 88$
Manufacturing Overhead 32$
Total Cost 236$
Unit Cost 118$
Apply manufacturing overhead to jobs using a
predetermined overhead rate (POHR) based on
direct labor hours (DLH).