Job Costing Flashcards

1
Q

Job costing

A

Used where many different products, orders or series of products are produced in every period

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2
Q

Examples

Job costing

A
  • Advertising comany
  • Medical pratice
  • Legal practice
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3
Q

Process costing

A

Used where masses of homogenous products (of the same nature/kind) are produced

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4
Q

Examples

Process costing

A
  • Mill
  • Soft drink manufacturer
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5
Q

Just-in-time system

A

Simplifies entries in Accounting System

Reduces risk of obsolete inventory

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6
Q

POSITIVE impact on storage costs

Just-in-time system

A

Storage costs are lower meaning we don’t have to store as much inventory

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7
Q

Negative side

Just-in-time system

A

Supplier may not have sufficient inventory or may not deliver

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8
Q

Cost of Goods Manufactured (CoGM)

A

Absorption cost assigns Fixed MOH -> CoMP (Cost of Manufactured Products), where FC as Period Cost as VC Calc

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9
Q

Calculation of CoGM

A

Calc RM use by:
1. Opening Bal + Purchases - Closing Bal
2. MC + DLC
3. = Primary Cost
4. + MOH (Actual or Allocated depending on info)
5. = Total Manufacturing Cost
6. + WIP (Opening Bal)
7. - WIP (Closing Bal)
8. = CoGM or CoGC

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10
Q

Cost of Goods Sold (CoGS)

A

Will be actual CoGS when actual MOH is + to Primary Cost = Total Manufacturing Cost

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11
Q

Framework

Cost of Goods Sold

A
  1. Cost of Goods Manufactured
    • Finished Goods opening bal
    • Finished Goods closing bal
  2. = Cost of Goods Sold
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