Scribd
Upload
91 views

Introduction To Cost Accounting Job Order Costing Accounting For Losses

This document provides an introduction to cost accounting, including key concepts like job order costing, inventory accounts, and cost accumulation systems. It discusses how job order costing works by assigning a number and cost sheet to each job to track direct materials, direct labor, and applied manufacturing overhead. It also presents a sample cost accounting problem to demonstrate tracking costs through jobs and calculating total manufacturing costs, cost of goods manufactured, and cost of goods sold.

Uploaded by

Sophia Grace Niduaza
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
91 views

Introduction To Cost Accounting Job Order Costing Accounting For Losses

This document provides an introduction to cost accounting, including key concepts like job order costing, inventory accounts, and cost accumulation systems. It discusses how job order costing works by assigning a number and cost sheet to each job to track direct materials, direct labor, and applied manufacturing overhead. It also presents a sample cost accounting problem to demonstrate tracking costs through jobs and calculating total manufacturing costs, cost of goods manufactured, and cost of goods sold.

Uploaded by

Sophia Grace Niduaza
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 16

INTRODUCTION TO

COST ACCOUNTING

Introduction to Cost Accounting


Job Order Costing
Accounting for Losses
Cost Accounting
 Cost accounting is a system that records,
summarizes, analyzes and interprets the details of
the costs of materials, labor and overhead
necessary to produce and sell an article.
Costs
 Product Cost
 Direct Materials
 Direct Labor
 Manufacturing Overhead
 Indirect Material
 Indirect Labor
 Other Manufacturing Overhead

 Period Cost
Inventory Accounts
 Raw Material Inventory
 Work in Process Inventory
 Finished Goods Inventory
Cost Accumulation System

Types of Cost Direct Materials Direct Labor Manufacturing


System Overhead
Actual Cost system Actual Actual Actual
Standard Cost Standard Standard Standard
System
Normal Costing Actual Actual Predetermined
Overhead
Cost Flow
 Raw Materials purchases (DM and IM)
 Raw Materials usage
 Labor incurred (DL and IL)
 Labor charged to production
 Other Manufacturing overhead incurred
 OMOH charged to production
Computation of Total Costs
 Total Manufacturing Cost (TMC)
 Cost of Goods Manufactured (CGM)
 Cost of Goods Sold (CGS)
JOB ORDER COSTING SYSTEM
Job Order Costing System
 It accumulates costs applicable to each specified job order.
 When job begins, job is assigned with a number and form called
job cost sheet is prepared.
 Each Job has a job cost sheet wherein DM, DL and MOH incurred
to finish the job are recorded.
 Estimated MOH is computed through predetermined overhead rate
 Estimated MOH will be recorded in WIP while actual MOH are
maintained in MOH Control account
 Estimated (applied MOH) is compared to Actual MOH to
determine the over or underapplied.
 Over and under application will be adjusted to CGS as general
Sample Problem
Details of inventories are:
Finished Goods Inventory P65,000
Materials Inventorye P44,000
Job 101 Job 102

Work in process inventory 5,000

Direct Materials:
1000 units of A @P5 5,000
400 units of B @ P3 1,200
Direct Labor:
1000 hours @4 4,000
400 hours @5 2,000
Factory overead applied at the rate of P2 per 2000 800
direct labor hor
Sample Problem
During January, the following transactions were completed:
a. Materials were purchased on account for P229,040
b. Payroll totaling P220000 was accrued
c. Payroll was distributed as follows: Job 101, 5000 DLH @8; Job 102, 8000 DLH @P10;
Job 103, 6000 DLH @P6. Indirect labor, P24,000 and selling and admin expense P40000
d. Materials were issued as follows: P103200 to Job 101; P84,000 to Job 102; P29150 to
Job 103. Indirect materials costing P15040 were issued
e. Factory overhead was applied to Job 101, 102 and 103 at a rate of P4.50 per DLH
f. Jobs 101 and 102 were competed and immediately sold on account for P250000 and
270000 respectively
g. After allowing a 5% cash discount, a net amount of P494000 was collected on accounts
receivable
h. Marketing and administrative expense (other than salaries) paid during the month
amounted to P30000. Other factory overhead paid P49720
i. Payments on account, other than payrolls paud, amounted to P170000
j. Applied MOH is closed to MOH control account. The over or under applied overhead is
then closed to CGS
ACCOUNTING FOR LOSSES
Accounting for Scrap
Accounting for Spoilage
Accounting for Rework or defects
Thank you 

You might also like