Job Order Cost System There are two main cost accounting systems used: Job order cost systems and Process cost systems. Both have very distinct differences that help each specialize in a certain type of manufacturing company. The job order cost system in particular is used to "provide product costs for each quantity of a product that is manufactured." When a product is called to be manufactured‚ then it is called a job. Once the job is ordered‚ the manufacturing company must go through a flow
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Hogle Company – Job Order Costing Example Hogle Company is a manufacturing firm that uses job-order costing. On January 1‚ the beginning of its fiscal year‚ the company’s inventory balances were as follows: Raw materials $20‚000 Work in process 15‚000 Finished goods 30‚000 Prepaid Insurance 10‚000 The company applies overhead cost to jobs on the basis of machine-hours worked. For the current year‚ the company estimated that it would work 75‚000 machine hours and incur $450
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Differences between Activity-Based Costing and Traditional Cost Strategy Activity-based costing (ABC) is a costing model that identifies overhead activities in an organization and assigns the cost of each activity resource to all products and services according to the actual consumption‚ while traditional costing equally distributes all overhead expenses. Thus‚ an organization employing ABC‚ can precisely estimate the cost of its individual products and services for the purposes of identifying and
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Chapter 5—Job Order Costing MULTIPLE CHOICE 1. Which of the following organizations would be most likely to use a job-order costing system? a. | the loan department of a bank | b. | the check clearing department of a bank | c. | a manufacturer of processed cheese food | d. | a manufacturer of video cassette tapes | ANS: A PTS: 1 DIF: Moderate OBJ: 5-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement‚ Reporting 2. When
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Send Print Share ABC: too much activity and not enough costing? by Brian Rutherford 03 Feb 2001 Diploma in Financial Management Relevant to Paper D2 | | Activity based costing (ABC) hit the world of financial management with a very large bang in the late 1980s. Within a few years 20% of the UK’s largest companies were using‚ or at least piloting‚ ABC systems. By the turn of the millennium‚ however‚ the proportion of adopters was no higher‚ while one third of those adopting the technique
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Introduction: Process costing is a form of operations costing which is used where standardized homogeneous goods are produced. This costing method is used in industries like chemicals‚ textiles‚ steel‚ rubber‚ sugar‚ shoes‚ petrol etc. Process costing is also used in the assembly type of industries also. It is assumed in process costing that the average cost presents the cost per unit. Cost of production during a particular period
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TOTAL ASSET MANAGEMENT Life Cycle Costing Guideline September 2004 TAM04-10 Life Cycle Costing Guideline September 2004 TAM04-10 ISBN 0 7313 3325 X (set) ISBN 0 7313 3272 5 1. 2. 3. I. Asset management – New South Wales. Capital Investment. Public administration – New South Wales Title. (Series : TAM 2004) This work is copyright. Apart from any use as permitted under the Copyright Act 1968‚ no part may be reproduced by any process without written permission from
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Introduction to Standard Costing Standard costing is an important subtopic of cost accounting. Standard costs are usually associated with a manufacturing company’s costs of direct material‚ direct labor‚ and manufacturing overhead. Rather than assigning the actual costs of direct material‚ direct labor‚ and manufacturing overhead to a product‚ many manufacturers assign the expected or standard cost. This means that a manufacturer’s inventories and cost of goods sold will begin with amounts reflecting
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Part one: Activity-based costing (ABC) is an accounting system that aids in providing various methods of calculating dynamically and practically the true cost of doing business for manufacturers and services. The core characteristic of ABC is that overhead costs are driven by activities themselves not products. ABC assigns a company’s overhead costs‚ which are the indirect cost such as electricity‚ lighting‚ heat or marketing‚ into the product’s cost. Specifically‚ ABC applies nonunit-level activity
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Priceline case 1. (a) Joe Delong is not sure about the difference between cost accounting and a cost accounting system. Explain the difference to Joe. (b) What is an important feature of a cost accounting system? 2. (a) Distinguish between the two types of cost accounting systems. (b) May a company use both types of cost accounting systems? 3. What type of industry is likely to use a job order cost system? Give some examples. 4. What type of industry is likely to use a process cost system
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