COSTING SYSTMES

COSTING SYSTMES

1. Building Blocks:

   • Cost Object: the distinct type of job
   • Direct Cost Pools: traced seperately from indirect cost
   • Indirect Cost Pool: allocated to the cost object
   • Cost Pool: grouping of individual indirect cost items
   • Cost Allocation Base: a systmatic way to link an indirect cost/group of indirect cost to cost objects (#of machine hrs, or labour hrs)

2. Types of Costing Systmes

   • Job Costing: assigns cost to distinct units of a product or service
   • Process Costing: assign cost to masses of identical/similar units and compute unit costs on an average basis

3. Evaluating and Implementing Job Costing Systmes

   • 1. Identify the job-> the cost object
     • 2. Identify the direct cost of the object
       • 3. Select the cost-allocation base to use for allocating the I.C to the cost object
         • 4. Identify and add all the I.C into one I.C pool
           • 5. Compute the I.C allocation rate
             • 6. Compute the I.C assigned to the cost object
               • 7. Compute the T.C of the distinct object by adding all DC/IC assigned to the job

4. Actual Budgeted and Normal costing chart

5. Adjustments for over-and underallocated cost

   • 1. adjust the allocation base
     • 2. prorate on the basis of the total amount of the allocated MOH cost in the ending blances of WIP, FG, COGS account

6. Definitions:

   • Source document: the origninal record that supprots journal entries in the accounting systmes
     • Job cost Records/job cost sheet: records and accumulates al the cost assigned to a specific job, strating when the work begins
       • Labour time sheet: contains info about the amount of labour time used for a specific job in spicific dept; source doucment for DML
         • MOH allocted: the amount of MOH allocted to distint types of jobs based on the budgeted rate multiplied by the actual qty of the allocation base used
           • Budgeted MOH: EST MOH/EST BASE
             • Underallocated I.C: occur when the allocated amount of I.C in an accounting period is less than the acutal amount
               • Overallocated I.C: when the allocated amount of I.C in an accounting period is greater than the acutual amount

Imagens e arquivos do mapa