Class Notes (837,621)
United States (325,118)
Business (60)
BUS 215 (6)
Lecture 3

BUS 215 Lecture 3: Job Order Costing
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Department
Business
Course
BUS 215
Professor
Trisha Anderson
Semester
Spring

Description
Job-Order Costing  Direct Materials + Direct Labor +Manufacturing Overhead Applied = Manufacturing Costs o Charge direct material and direct labor costs to each job as work is performed o Manufacturing overhead, including indirect materials and indirect labor, are allocated to all jobs rather than directly traced to each job  Compute predetermined overhead rate o Step 1: Estimated Variable + Estimated Fixed Manufacturing Overhead divided by cost driver = PohR  (Direct Labor Hours, Direct Machine Hours, Direct Labor $) o Step 2: PohR x Actual Cost Driver = Manufacturing Overhead Applied (ignore all estimates once this rate is found)  Why Use an Allocation Base? o Allocation Base = Cost Driver o An allocation base, such as direct labor hours, direct labor dollars, or machine hours, is used to assign manufacturing overhead to individual jobs. o We use an allocation base because
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