Lecture Fundamental accounting principles - Chapter 20: Process costing. The learning objectives for this chapter include: Explain process operations and the way they differ from job order operations, define and compute equivalent units and explain their use in process cost accounting, define and prepare a process cost summary and describe its purposes. | Job Order Costing Chapter 19 PowerPoint Editor: Beth Kane, MBA, CPA Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 19: Job Order Costing 19-C1: Job Order Costing 2 Process Costing Job Costing Used for production of large, unique, or high-cost items. Built to order rather than mass produced. Many costs can be directly traced to each job. Cost Accounting Systems Chapter 20 C 1 3 The two basic types of cost accounting systems are job order costing and process costing. Many companies produce products individually designed to meet the needs of a specific customer. Each customized product is manufactured separately and its production is called job order production. Process operations, also called process manufacturing or process production, is the mass production of products in a continuous flow of steps. Unlike job order production, where every product differs depending on customer needs, process operations are designed to mass-produce large quantities of identical products. Job Order Production C 1 4 This slide lists important features of job order and process operations. Both types of operations are used by manufacturers and also by service companies. Movies made by Walt Disney and financial audits done by KPMG are examples of job order service operations. Order processing in large mail-order firms like . Bean is an example of a process service operation. Job Order Production Activities C 1 5 An overview of job order production activity and cost flows is shown. This slide shows the March production activity of Road Warriors, which installs entertainment systems and security devices in cars and trucks. The company customizes any vehicle by adding speakers, amplifiers, video systems, alarms, and reinforced exteriors. Job order production for Road Warriors requires materials, labor, and overhead costs. Recall that direct materials are used in . | Job Order Costing Chapter 19 PowerPoint Editor: Beth Kane, MBA, CPA Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 19: Job Order Costing 19-C1: Job Order Costing 2 Process Costing Job Costing Used for production of large, unique, or high-cost items. Built to order rather than mass produced. Many costs can be directly traced to each job. Cost Accounting Systems Chapter 20 C 1 3 The two basic types of cost accounting systems are job order costing and process costing. Many companies produce products individually designed to meet the needs of a specific customer. Each customized product is manufactured separately and its production is called job order production. Process operations, also called process manufacturing or process production, is the mass production of products in a continuous flow of steps. Unlike job order production, where every product differs depending
