Chap 2 Flashcards
job order costs
measure, record, and report product costs
uses of product costs
set prices
control operations
devlop financial statements
job order cost system
provides product costs for each quantity of product that is manufactured
often used by companies that manufacture custom products for customers or batches of similar products
process costs system
provides product costs for each manufacturing dept or process
system of assigning direct materials, direct labor, overhead to specific processes
often used by companies that manufacture units of a product that are indistinguishable from each other and are manufactured using a continuous production process
job order systems record and summarize manufacturing costs by jobs
work in process
finished goods
COGS
work in process
jobs still in production
finished goods
jobs completed
COGS
sold to customers
receiving report
prepared when materials that have been ordered are received and inspected
direct material
quantities and amounts from material requisition are posted to job cost sheets
factory overhead
manufacturing costs except direct labor and materials
come from variety of sources (utilities, acct, wages)
Factory overhead costs are normally allocated or applied to jobs using a predetermined FO rate
est total for costs/est activity base
under applied OH
the amount applied (using POHR) is LESS THAN the actual amount
factory oh will have debit balance
over applied OH
the amount applied (using POHR) is GREATER THAN the actual amount
FOH will have credit balance
period costs
on income statement
used in generating rev during the current period
not involved in the manufacturing process
recorded as expenses of the current period
