Professional Documents
Culture Documents
Job Costing
Terms
Cost Pool a logical grouping of related cost
objects
Cost-allocation base the basis used to
allocate indirect costs.
Ex., Direct labor hours, machine hours,
square feet
Costing Systems
Job-Costing: Used to cost heterogeneous jobs
that consume different resources
Wedding announcements, aircraft, advertising
Costing Approaches
Actual Costing
Allocates indirect costs using actual indirectcost rates and actual activity consumption
Rarely used in practice
Normal Costing
Allocates indirect costs using budgeted
indirect-cost rates and actual activity
consumption
Under both methods, direct costs are traced.
2009 Pearson Prentice Hall. All rights reserved.
Sample
Job
Cost
Document
Job Costing
Overview
Journal Entries
XX
WIP Control
XX
MOH Control (indirect)
XX
Materials Control (direct)
XX
XX
XX
XX
XX
Salaries payable-control
XX
Accounts payable-control
XX
Accum deprec-control
XX
Prepaid expenses-control
XX
XX
Indirect costs
Never posted directly to WIP
Posted to MOH when incurred
Allocated to WIP systematically
MOH
Invoices
XX
XX
Allocation
s
WIP
XX
FG
XX
XX
Income
Statement
Revenues
COGS
Gross margin
XX
(XX)
XX