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ADMS 3510 (18)
Lecture

acc1.doc

2 Pages
87 Views

Department
Administrative Studies
Course Code
ADMS 3510
Professor
Rebecca Jubis

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Description
Job Order Cost Accounting Cost Accounting Systems • Cost accounting involves the measuring, recording, and reporting of product costs • From the data accumulated, both the total cost and unit cost of each product is determined • A cost accounting system consists of accounts for the various manufacturing costs. • These accounts are fully integrated into the general ledger of a company. • An important feature of a cost accounting system is the use of a perpetual inventory system. Such a system provides information immediately on the cost of a product. • The two basic types of cost accounting systems are: • Job-order cost system • Process cost system • Under a job-order cost system, costs are assigned to each job or to each batch of goods • A process cost system is used when a large volume of similar products are manufactured. Process costing accumulates product-related costs for a period of time instead of assigning coststo specific products or job-orders Job Order Manufacturing (Customized Production) • Customized production of unique products specific to a client’s needs • “Job Order Cost Accounting” is designed to keep track of the direct material costs, the direct labor costs, and the overhead costs that are directly traceable to specific jobs (Unique Products) • A “Job” is a unique item that will be manufactured for a client • Examples of Jobs: Machinery / Airplane / Train / Furniture Piece/ Building • Example of Jobs: Bombardier manufactures specific airplanes for each specific client order • A “Batch of goods” – Producing more than one unit of a specific product • Exa
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