AFM102 Chapter Notes - Chapter 3: Subledger, Deutsche Luft Hansa, Total Absorption Costing
18 Oct 2017
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Process and job-order costing: process costing system: a costing system used in those manufacturing situations where a single, homogeneous product (such as cement or oil) flows in a continuous stream out of the production process. Incremental cost something less than average unit cost as much of actual overhead would not change for the new unit produced: summary of document flows. Job-order costing the flow of costs: the purchase and issue of materials, purchase: raw materials inventory is an asset account. Issue of direct and indirect materials: wip direct, moh indirect. Issue of direct materials only: labour cost, manufacturing overhead costs. The application of manufacturing overhead: rate: calculated by dividing the estimated total manufacturing overhead cost by the estimated total units in the allocation base (e. g. machine-hours, direct labour-hours etc. Only the applied overhead cost, based on the predetermined overhead rate, appears on the job cost sheet and in the wip account.
