Systems Design: Job-Order Costing 2/16/04 Chapter 3 Systems Design: Job-Order Costing 2/16/04

Types of Costing Systems Used to Determine Product Costs Process Costing Job-order Costing Chapter 4 Banyak produk yang berbeda dalam tiap periode. Produk dibuat berdasarkan pesanan. Biaya dilacak atau di alokasikan ke tiap pesanan. Catatan biaya harus dibuat dengan baik untuk tiap produk atau pekerjaan.

Job Order Costing System Process Costing Job-order Costing Typical job order cost applications: Special-order printing Building construction Also used in the service industry Hospitals Law firms

Process Cost System Perusahaan membuat banyak unit yang sama dalam periode yang panjang Examples: orange juice concentrate, paper, mixing and bottling beverages, gasoline. Biaya diakumulasikan ke tiap departemen Total biaya dibagi dengan jumlah unit yang diproduksi untuk memperoleh biaya per unit

Quick Check  Which of the following companies would be likely to use job-order costing rather than process costing? a. Scott Paper Company for Kleenex. b. Architects. c. Heinz for ketchup. d. Caterer for a wedding reception. e. Builder of commercial fishing vessels.

Job-Order Costing The Job Manufacturing overhead (OH) Applied to each job using a predetermined rate Direct material Direct labor Traced directly to each job The Job

Sequence of Events in a Job-Order Costing System Membebankan biaya bahan baku dan tenaga kerja ke tiap perkerjaan yang dilakukan. Direct Materials Job No. 1 Direct Labor Job No. 2 Manufacturing Overhead Job No. 3

Sequence of Events in a Job-Order Costing System Direct Materials Tetapkan nilai overhead dengan predeter-mined rate. Job No. 1 Direct Labor Job No. 2 Manufacturing Overhead Job No. 3

Job-Order Cost Accounting The primary document for tracking the costs associated with a given job is the job cost sheet. Let’s investigate

Job-Order Cost Accounting PearCo Job Cost Sheet Job Number A - 143 Date Initiated 3-4-01 Date Completed Department B3 Units Completed Item Wooden cargo crate Direct Materials Direct Labor Manufacturing Overhead Req. No. Amount Ticket Hours Rate Cost Summary Units Shipped Date Number Balance Total Cost Unit Product Cost

Job-Order Cost Accounting PearCo Job Cost Sheet Job Number A - 143 Date Initiated 3-4-01 Date Completed Department B3 Units Completed Item Wooden cargo crate Direct Materials Direct Labor Manufacturing Overhead Req. No. Amount Ticket Hours Rate Cost Summary Units Shipped Date Number Balance Total Cost Unit Product Cost Let’s see one Materials requisition form digunakan untuk menentukan bahan baku yang digunakan di tiap pekerjaan.

Materials Requisition Form Will E. Delite

Materials Requisition Form Cost of material is charged to job A-143. Type, quantity, and total cost of material charged to job A-143. Will E. Delite

Job-Order Cost Accounting

Job-Order Cost Accounting Pekerja menggunakan time tickets untuk mencatat waktu untuk menyelesaikan tiap pesanan . Let’s see one

Employee Time Ticket

Job-Order Cost Accounting

Job-Order Cost Accounting Apply manufacturing overhead to jobs using a predetermined overhead rate of $4 per direct labor hour (DLH). Let’s do it

Job-Order Cost Accounting

Application of Manufacturing Overhead The predetermined overhead rate (POHR) digunakan untuk membebankan overhead pada pekerjaan yang ditentukan sebelum pekerjaan itu dimulai. Estimated total manufacturing overhead cost for the coming period Estimated total units in the allocation base for the coming period POHR = Idialnya, dasar pengalokasian biaya adalah pemicu biaya dari overhead.

Application of Manufacturing Overhead Berdasarkan pada perkiraan, dan ditetapkan sebelum awal periodebegins. Overhead applied = POHR × Actual activity Jumlah aktual dari allocation base seperti unit yg diproduksi, jam kerja karyawan, atau jam kerja mesin yg terjadi dalam satu periode.

Application of Manufacturing Overhead Recall the wooden crate example where: Overhead applied = $4 per DLH × 8 DLH = $32 Overhead applied = POHR × Actual activity

The Need for a Predetermined Manufacturing Overhead Rate Penggunaan predetermined rate memungkinkan untuk melakukan estimasi biaya total diawal. Actual overhead dalam satu periode tidak dapat diketahui hingga akhir periode $

Overhead Application Example PearCo menerapkan overhead berdasarkan direct labor hours. Total estimated overhead dlm satu th $640,000. Total estimated labor cost adalah $1,400,000 dan total estimated labor hours adalah 160,000. Berapa Pear Co.’s predetermined overhead rate per haurs(jam)?

Overhead Application Example Estimated total manufacturing overhead cost for the coming period Estimated total units in the allocation base for the coming period POHR = $640,000 160,000 direct labor hours (DLH) POHR = POHR = $4.00 per DLH For each direct labor hour worked on a job, $4.00 of factory overhead will be applied to the job.

Overhead Application Example What amount of overhead will PearCo apply to Job X-32?

Overhead Application Example

Quick Check  Job WR53 at NW Fab, Inc. required $200 of direct materials and 10 direct labor hours at $15 per hour. Estimated total overhead for the year was $760,000 and estimated direct labor hours were 20,000. What would be recorded as the cost of job WR53? a. $200. b. $350. c. $380. d. $730.

Quick Check  Job WR53 at NW Fab, Inc. required $200 of direct materials and 10 direct labor hours at $15 per hour. Estimated total overhead for the year was $760,000 and estimated direct labor hours were 19,000. What would be recorded as the cost of job WR53? a. $200. b. $350. c. $750. d. $730.

Allocation Base Cost Driver adalah faktor yang secara langsung menyebabkan biaya overhead muncul Cost Driver harus merupakan hal umum untuk semua perusahaan jasa dan produksi. Yang termasuk Cost Drivers adalah machine-hours, direct labor, computer time, direct material cost, etc. Penentuan Cost Drivers yang tepat merupakan hal yang penting untuk kelayakan alokasi overhead

Job-Order Costing Document Flow Summary Let’s summarize the document flow in a job-order costing system.

Job-Order Costing Document Flow Summary Materials used may be either direct or indirect. Direct materials Job Cost Sheets Materials Requisition Indirect materials Manufacturing Overhead Account

Job-Order Costing Document Flow Summary An employee’s time may be either direct or indirect. Direct Labor Job Cost Sheets Employee Time Ticket Indirect Labor Manufacturing Overhead Account

Job-Order Costing Document Flow Summary Employee Time Ticket Indirect Labor Other Actual OH Charges Manufacturing Overhead Account Applied Overhead Job Cost Sheets Indirect Material Materials Requisition

Job-Order System Cost Flows Let’s examine the cost flows in a job-order costing system..

Job-Order System Cost Flows Raw Materials Work in Process (Job Cost Sheet) Direct Materials Material Purchases Direct Materials Indirect Materials Mfg. Overhead Actual Applied Indirect Materials

Job-Order System Cost Flows Salaries and Wages Payable Work in Process (Job Cost Sheet) Direct Labor Direct Materials Indirect Labor Direct Labor Overhead Applied Mfg. Overhead Actual Applied If actual and applied manufacturing overhead are not equal, a year-end adjustment is required. Indirect Materials Overhead Applied to Work in Process Indirect Labor, All Other

Job-Order System Cost Flows Work in Process (Job Cost Sheet) Finished Goods Cost of Goods Mfd. Cost of Goods Sold Direct Materials Cost of Goods Mfd. Direct Labor Overhead Applied Cost of Goods Sold Cost of Goods Sold

Job-Order System Cost Flows Let’s return to PearCo and see what we will do if actual and applied overhead are not equal.

Overhead Application Example PearCo’s actual overhead for the year was $650,000 for a total of 170,000 direct labor hours. How much total overhead was applied to PearCo’s jobs during the year? Use PearCo’s predetermined overhead rate of $4.00 per direct labor hour. PearCo has overapplied overhead for the year by $30,000. What will PearCo do? SOLUTION Applied Overhead = POHR × Actual Direct Labor Hours Applied Overhead = $4.00 per DLH × 170,000 DLH = $680,000

Overapplied and Underapplied Manufacturing Overhead $30,000 may be closed directly to cost of goods sold. Cost of Goods Sold PearCo’s Method $30,000 may be allocated to these accounts. OR Work in Process Finished Goods Cost of Goods Sold

Overapplied and Underapplied Manufacturing Overhead PearCo’s Cost of Goods Sold PearCo’s Mfg. Overhead Unadjusted Balance Actual overheadcosts $650,000 OverheadApplied to jobs $680,000 $30,000 Adjusted Balance $30,000 $30,000 overapplied

Quick Check  What effect will the adjustment of over-applied overhead have on Pear Co’s cost of goods sold? a. Cost of goods sold will increase. b. Cost of goods sold will be unaffected. c. Cost of goods sold will decrease.

Quick Check  What effect will the overapplied overhead have on PearCo’s net operating income? a. Net operating income will increase. b. Net operating income will be unaffected. c. Net operating income will decrease.

If Over/Under significant, Allocate Between Accounts Determine the amount of overhead applied to WIP, Finished Goods and COGS Calculate the % of total Overhead applied to each account Multiply the Over/Under amount times the %’s and allocate to each account See example on page 115

Quick Check  Tiger, Inc. had actual manufacturing overhead costs of $1,210,000 and a predetermined overhead rate of $4.00 per machine hour. Tiger, Inc. worked 290,000 machine hours during the period. Tiger’s manufacturing overhead is a. $50,000 overapplied. b. $50,000 underapplied. c. $60,000 overapplied. d. $60,000 underapplied. Overhead Applied $4.00 per hour × 290,000 hours = $1,160,000 Underapplied Overhead $1,210,000 - $1,160,000 = $50,000

End of Chapter 3