Chapter 17 - Accounting systems for measuring costs. In this chapter students will be able to: Explain the purposes of cost accounting systems, distinguish between the processes for creating goods and services that are suited to job order costing, process costing, and activity-based costing, describe the purpose and the content of a job cost sheet,. | Accounting Systems For Measuring Costs Chapter 17 2 Planning and control functions. Providing products or services to customers. Assessing the efficiency and effectiveness of operations. Determining unit manufacturing costs. Cost accounting systems provide information supporting decisions making the business successful. Cost Accounting Systems Disclose inventories and cost of goods sold. Track resources consumed by products and services. Manage activities that consume resources. Evaluate and reward employee performance. Cost accounting systems are the procedures and techniques used by management. Cost Accounting Systems Process Costing Job Order Costing Used for production of large, unique, high-cost items. Built to order rather than mass produced. Many costs can be directly traced to each job. Basic Cost Accounting Procedures Typical job order cost applications: Special-order printing Building construction Also used in service industry Hospitals Law firms Basic Cost Accounting Procedures Process Costing Job Order Costing Used for production of small, identical, low-cost items. Mass produced in automated continuous production process. Costs cannot be directly traced to each unit of product. Basic Cost Accounting Procedures Process Costing Job Order Costing Typical process cost applications: Petrochemical refinery Paint manufacturer Paper mill Basic Cost Accounting Procedures Process Costing Job Order Costing THE JOB Direct materials Direct labor Traced directly to each job Traced directly to each job Manufacturing overhead (OH) Applied to each job using a predetermined rate (POHR) Job Order Costing The primary document for tracking the costs associated with a given job is the job cost sheet. Let’s investigate Job Order Costing The Job Cost Sheet The Job Cost Sheet The Job Cost Sheet Accumulate direct labor costs by means of a work record, such as a time ticket, for each employee. The Job Cost Sheet Apply manufacturing overhead to jobs using a . | Accounting Systems For Measuring Costs Chapter 17 2 Planning and control functions. Providing products or services to customers. Assessing the efficiency and effectiveness of operations. Determining unit manufacturing costs. Cost accounting systems provide information supporting decisions making the business successful. Cost Accounting Systems Disclose inventories and cost of goods sold. Track resources consumed by products and services. Manage activities that consume resources. Evaluate and reward employee performance. Cost accounting systems are the procedures and techniques used by management. Cost Accounting Systems Process Costing Job Order Costing Used for production of large, unique, high-cost items. Built to order rather than mass produced. Many costs can be directly traced to each job. Basic Cost Accounting Procedures Typical job order cost applications: Special-order printing Building construction Also used in service industry Hospitals Law firms Basic Cost Accounting .
