Part 1 (Handout from BS) Flashcards
in this costing, cost is traced to an individual batch, specific units, lot or contract. It involves a series of separate jobs.
job order costing
In this costing, cost is traced to a department, operation, or some other subdivision within the factory as long as it involves a continuous flow rather than a series of separate jobs.
process costing
Job Order Costing method is used when;
(intindi to remember)
- Products are manufactured within a department or cost center are heterogeneous or dissimilar products. (magkakaiba ung specific materials or details ng product)
- They are manufactured individually or in distinct lots or batches.
- Each job requiring different amounts of materials, labor and overhead
Costs should be recorded _________ (how?) for every job produced.
separately
Keeping of individual records is possible only if the various inputs to a job can be __________.
easily identified
this record must be kept for each job and updated as work progresses.
Detailed cost record
Job order costing is applicable to _____________ work in factories, manufacturers of expensive, one of a kind item such as building contractors, ship builders, and motion picture companies, workshops, repair shops, job printers, construction engineers, and service business such as medical, legal, architectural, accounting and consulting firms.
made-to-order
Disposition of over-under applied Overhead Account
When factory overhead is over-under applied and a variance or
difference results, either of the following methods is acceptable to account for the difference in closing the account
What are these? who required and deemed these methods acceptable?
- If difference is insignificant (immaterial) to Cost of Goods Sold or Income Summary.
- If difference is significant (material) to Cost of Goods sold and Inventories.
these methods are in accordance with the Cost Accounting Standards Board requirements
The over-or under applied factory overhead may be debited or credited to Cost of Goods Sold (most common treatment or most convenient) or Income Summary.
In this case the difference is?
The difference is insignificant (immaterial) to Cost of Goods Sold or Income Summary.
The difference between the over/under applied and actual has no effect on unit cost and treats the entire variance as a period cost.
The difference is insignificant (immaterial) to Cost of Goods Sold or Income Summary.
The over- under applied factory overhead may be debited or credited to Cost of Goods Sold and Ending Inventories (Work-in-Process and Finished Goods).
in this case, the difference is?
The difference is significant (material) to Cost of Goods sold and Inventories.
The difference between the over/under applied and actual would change cost per unit.
The difference is significant (material) to Cost of Goods sold and Inventories.
The difference is significant (material) to Cost of Goods sold and Inventories.
What entry should be if it is UNDER APPLIED or the ACTUAL IS BIGGER?
Debit: WIP, FG, COGS
Credit: OH (Overhead of the under applied)
The difference is significant (material) to Cost of Goods sold and Inventories.
What entry should be if it is OVER APPLIED or the ACTUAL IS LOWER?
Debit: OH (Overhead of the over applied)
Credit: WIP, FG, COGS
The difference is insignificant (immaterial) to Cost of Goods Sold or Income Summary.
What entry should be if it is OVER APPLIED or the ACTUAL IS LOWER?
Debit: OH (Overhead of the over applied)
Credit: COGS
The difference is insignificant (immaterial) to Cost of Goods Sold or Income Summary.
What entry should be if it is UNDER APPLIED or the ACTUAL IS BIGGER?
Debit: COGS
Credit: OH (Overhead of the under applied)
