ACG 2071

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ACG 2071
Chapter 34 Job Costing
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Overview of Job Costing

• Also called job order costing
• Involves costs accumulated by job usually for
  a particular order
• Subsidiary ledger tracks the status of jobs
• Consists of multiple job cost sheets
• One for each job
• Used to track/capture costs of a job

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Types of Product Costing

• Homogeneous products manufactured
• Costs are traced or allocated by process
• Examples Dog food, baby formula, canned
  vegetables, bottle of beer

• Manufactured to order
• Costs are traced or allocated to jobs
• Separate cost records for each distinct
  product/service/job
• Examples Special-order printing, buildings,
  patients, law firm clients

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Sequence of Events in Job Costing
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Job Cost Sheet
Primary document for tracking individual job costs
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Job Costs to Jobs
Direct Materials
Job No. 1
Job No. 2
Direct Labor
Job No. 3
Mfg. Overhead
Apply to jobs as activity is incurred
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Materials Requisition
Materials requisition form authorizes the use of
materials on a job
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Time Tickets
Time tickets to record the time spent on each job
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Tracking Job Costs

• Manufacturing Overhead
• Use a Normal Costing Method for OH Apply using a
  predetermined rate

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Manufacturing Overhead for Jobs

• Job costing uses normal costing for MOH
• As such, MOH must be applied using a
  predetermined OH rate based on actual activity
• Same approach as for products

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