RSM222H1 Lecture 3: Class 3

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Assigns it into a job (ex: a film) More specific to job but it is time consuming. Companies who manufacture a lot of stuff. For companies who make a lot of products that are the same. Need to maintain good job order cost flow. When sold, into cost of goods sold. Predetermined overhead rate at the beginning of year: formula: estimated annual overhead costs/estimated activity. Budget aspect -> we are within the plans for finances. Many different products are produced each period. Assigns and accumulates costs to a specific job. The unique nature of each order requires tracing. Examples: bombardier, film making, jones (my jones program custom orders) A company produces many units of a single product. One unit of product is indistinguishable from the other. Accumulates costs by process or department and then assigns them to a large number of identical products.

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