COMM 305 Lecture Notes - Lecture 3: General Ledger, Finished Good, Pro Rata
Document Summary
Consists of various manu costs that are fully integrated into the general ledger system. Use of perpetual inventory system to provie immediate, up-to- date info on the cost of a product. Costs are assigned to each job or batch. A job may be for a specific order or inventory. Key feature: each job or batch has its own distinguishing characteristics and related costs. Measures costs for each job completed not for set time periods logical business use: a custom-home builder: process cost system. Used when large volume of similar products are manufactured: cereal, automobiles, compact discs, paint. Cost are accumulted for a specific time period (a week or month) Costs are assigned to departments or processes for a set period of time. Job-order cost flows : the cost flow parallels the physical flow of the materials as they are converted into finished goods: manufacturing costs are assigned to wip, cost of completed jobs is transferred to finished goods.
