COST ACCOUNTING SYSTEMS Transactions The purchase of direct and indirect materials.

. The distribution of direct material to work in process. The distribution of indirect material to factory overhead. The purchase of direct and indirect labor resulting in factory payroll costs. The payment of the payroll to the factory employees. The distribution of indirect labor to factory overhead. The distribution of direct labor to work in process. The purchase of other indirect resources resulting Job Order/Process Costing Inventories AP/Cash WIP Inventories Factory OH Inventories Factory Payroll Wages Payable XX XX XX XX XX XX XX XX WIP-RM Inventories WIP-FOH Inventories -sameXX XX XX XX Standard Costing-Partial -sameStandard Costing-Single Immediate recognition of Price Variance. (Debit:UFV; Credit:FV) Immediate recognition of Usage Variance. Immediate recognition of Controllable and Capacity Variance. -sameJIT-Method 1 RIP AP/Cash -NEXX X X -NE-NEMethod 2 -sameMethod 3 -NE-

-NE-

-NE-

-NE-

CC Wages Pay.

XX X X XX

-same-

-same-

Wages Payable Cash Factory OH Factory Payroll WIP Factory Payroll Factory OH AP/Cash

XX XX XX XX XX XX XX XX

-same-

-sameX X

-same-

Wages Pay. Cash -NE-NE-NE-NE-NE-

WIP-FOH Factory Payroll WIP-DL Factory Payroll -same-

XX XX XX XX Immediate recognition of Controllable and Capacity Variance. Immediate recognition of -NEXX CC AP/Cash -same-

-same-

-same-

WIP

XX

-same-

X X

-NE-

-NE-

in additional overhead costs. FG The application of factory overhead. The transfer of completed jobs to finished goods.

Factory OH XX WIP

XX XX FG WIP-RM WIP-DL WIP-FOH Recognition of variances in the respective WIP accounts. (Debit:UFV; Credit:FV) Reversal of variances with the COGS/COS account. (Debit:FV; Credit:UFV) -sameXX XX XX XX

Rate and Efficiency Variance. FG -same-

-NEXX RIP CC X X X X XX COGS/COS FG COGS/CO S RIP CC -sameX X COGS/C OS FG -NEFG AP CC

-same-same-

COGS/COS FG

XX XX

The transfer of inventory costs to cost of goods sold. The sales of finished products.

Cash/AR Sales

XX XX

-same-

-same-

Reversal of variances with the COGS/COS account. (Debit:FV; Credit:UFV) -same-

ABC Methods 1. Identify the activities that consume resources. 2. Identifying Cost Drivers. Choose cost driver that causes the cost. Benefits received. Reasonableness. Examples of Cost Drivers: Machine Hours Labor Hours or Cost Pounds of Materials Handled Pages Typed

Machine Setups Purchase Orders Quality Inspections Number of Parts in a Product Miles Driven Computer Time Items Produced or Sold

Customers Served Flight Hours Number of Surgeries Scrap/Rework Orders Hours of Testing Time Number of Different Customers

3. Compute a cost rate per cost driver unit. Predetermined = Estimated Indirect Cost Indirect Cost Rate Est. Vol. of the Allocation Base 4. Assign cost to products.

STATEMENT OF COST OF GOODS MANUFACTURED and SOLD RAW MATERIALS USED: Raw Materials, beg. Add: Purchases xx Freight-in xx Less: Purchase Discount (xx) Purchase Returns and Allowances DIRECT LABOR FACTORY OVERHEAD Total Manufacturing Cost Add: Work in Process, beg. Total Cost Placed into Process Less: Work in Process, end. COST OF GOODS MANUFACTURED Add: Finished Goods, beg. Cost of Goods Available for Sale Less: Finished Goods, end. COST OF GOODS SOLD Pxx

EQUIVALENT PRODUCTION REPORT FIFO method xxx xxx (xxx) xxx Average method xxx xxx xxx

Total Units actually completed Add: Equivalent Units of WIP, end. Less: Equivalent Units of WIP, beg. TOTAL EQUIVALENT PRODUCTION Pxxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx Pxxx QUANTITY SCHEDULE

(xx)

Actual Quantity Equivalent Production Work in Process, beg. xxx Received from preceding dept./ Started in process/ Current Production xxx Increase in units xxx Total Units to be accounted xxx Finished and Transferred to next department: WIP, beg. xxx xxx Current Production xxx xxx WIP, end. xxx xxx Lost units xxx xxx Total Units as accounted xxx Total equivalent production for the period xxx

COST ANALYSIS Current Costs: Materials Direct Labor Amount Pxxx xxx Unit Cost Pxx xx Finished and transferred: Cost in Process, beg.: Costs last month Amount Pxxx Unit Cost

Manufacturing OH Total Cost in Process, beg. Cost from preceding department Total to be accounted STANDARD COST ACCOUNTING SYSTEMS

xxx xxx xxx xxx Pxxx

xx

xx Cost this month to complete Total cost of completion xxx Started in Process: xx Costs from preceding dept. Costs in this dept. xxx Total costs of completion xxx Total Costs to Transfer xxx

xxx xxx xx Pxx

Statement of Cost of Goods Manufactured Materials Costs Direct Labor Factory Overhead Cost of Goods Manufactured Statement of Cost of Goods Sold Cost of Goods Manufactured at Standard Less: Finished Goods Inventory, end. Cost of Goods Sold at Standard Add (Deduct): Variances Material Price Material Usage Labor Rate Labor Efficiency OH Spending OH Efficiency OH Effectiveness OH Capacity Cost of Goods Sold at Actual Pxxx xxx xxx P UF (F) UF (F) UF (F) UF (F) UF (F) UF (F) xxx Pxxx UF (F) UF (F) Actual Pxxx xxx xxx Variance Standard Pxx F/UF Pxxx xx F/UF xxx xx F/UF xxx Pxxx