Week 2: Job Order & Process Costing
Systems - Discussion
Job Order Costing (graded)
The job cost sheet is used to accumulate the three product costs: direct material, direct labor, & factory
overhead. Discuss the source documents for determining these amounts (that is, where do we get these
numbers, & how we arrive at the overhead?). Why is overhead the most difficult to assign?
Responses
Responses are listed below in the following order: response, author & the date & time the
response is posted.
Response Author Date/Time
Class Professor Backman 11/2/2012 4:38:12 AM
I really appreciate the quality & depth of your thoughts in last week's discussion
thread. Thanks
Let's start by looking at the following areas:
1. Manufacturing costs are made up of three categories. List them & define or explain
at least one of them.
2. What is the difference between product & period costs? List some examples of
each.
RE:
11/11/2012 11:50:12 PM
Class Andrea Faye Estacio
Three categories of manufacturing costs are direct materials, direct labor, & overhead costs.
RE:
11/7/2012 6:19:26 PM
Class Alison Richards
, Since many have answered the three categories of manufacturing costs which
are direct materials, direct labor, & overhead costs I will focus majority of my
attention on distinguishing the difference between product & period costs.
When we think of product costs it is for certain that we are bringing to an
inclusion of all the given costs in association with the cost of acquiring the
product. Or the cost associated with the cost of making the product. This is
where the three categories of the manufacturing costs come into play. When
goods are purchased or manufactured the product cost remains with the
product, up until the point where it is no longer sitting in inventory awaiting a
sale. For this given reason this is why the product costs are given to
inventory account within a balance sheet. As stated above upon the sale, the
goods are no longer in inventory as it is viewed as an expense & matched
against sales revenue. At the time of conception product costs are not treated
as expenses. From this explanation this is why direct materials as well as
direct labor cost aren’t treated as an expense when it is incurred but when the
product is marked as sold. The easiest way to get a grasp around period costs
is to take everything being left out in the above in means of cost & this would
be the period costs. Period costs are simply not included in product costs.
Period costs are different as they are expenses upon the income statement for
the given period in which the cost was incurred. Period costs aren’t enclosed
in purchased or manufactured goods. Examples of such are selling a product
& the sales commission in place would represent the period cost. Another
example of period cost is the renting of an office space also.
RE:
11/8/2012 7:48:47 PM
Class Cadette Batie
Alison:
The job cost sheet is the central feature of a job order cost system. It is the place where all the manufacturing
costs come together into one location. The essence of a job cost sheet is the three types of manufacturing
costs, they are: direct labor, direct materials & manufacturing overhead. Before we go any further it is
important to define these three manufacturing costs. Direct labor represents the people who do the core work
of the business. For example if the business is a construction company, direct labor would be the people
actually constructing the building. You can essentially think of direct labor as the people who make or build
the product. Direct Materials are all of the materials that go into making a product, also known as raw
materials. They are subdivided into direct materials & indirect materials. Direct materials are the raw
materials that become part of the product. For example, bricks, shingles & bath tubs would be the direct
materials when building a house. Manufacturing overhead is very straight forward, if a cost is not direct labor
or direct materials the cost is overhead. In other words, overhead is a multitude of different costs including
indirect labor & indirect materials. Some examples include, electricity, property, taxes, advertising,
accounting, janitors & cleaning supplies.
A job cost sheet is useful when accompany typically works on custom or unique jobs. For example, suppose
a company builds custom luxury homes. Each house is different & requires different building materials in
different amounts. In addition, some houses will require more labor than other houses. The only way for a
company to know how much it is costing the company to build each individual house is to keep track of the
costs on a job cost sheet. A job cost sheet simply accumulates the costs for each job. & of course, there will
be a separate job cost sheet for each separate job. Often times the job cost sheet will be located right where
,the factory workers are located. In fact, sometimes the factory workers themselves will update the job cast
sheet as they work on a specific job. For example, a worker might write on the job cost sheet that the worker
worked 3 hrs on a particular job. Sometimes workers will use a time clock or other documentation to record
how much time is spent on a particular job. The time clock cards or other documentation, if used, are called
source documents. Source documents are simply a way to help office clerks enter information onto the job
cost sheets rather than having the factory workers enter the information. Again, how the information is
entered on to the job cost sheets all depends on what is easiest for the company.
Source:
http://academic.regis.edu/dbush/Accounting/Accounting%20Help/Job%20Cost
%20Accounting/job_cost_job_cost_sheet.htm
Cadette Professor Backman 11/11/2012 6:20:24 AM
Where would you find product & period costs on the income
statement?
RE: 11/11/2012 3:03:25
Cadette Cadette Batie PM
Prof;
You would find product cost on an income
statement in the Cost of Sales because this is where
you see the price of materials & inventory. Also
you find periodic cost on the income statement in
the General & Administrative Costs because this is
the majority of the periodic cost for things like
salaries & rent & insurance on the building that the
plant or factory is located. Income Statement
Basics
RE:
11/7/2012 6:41:28 PM
Class Irene Turay
Manufactoring cost is the cost of manufactoring company of making a
product consisting of direct matrial. Basically it means that how much its
going to cost a company to make a product, all their expenses. An example
would be direct material of a television $3000 labor cost $2000 & the
overhead is $2000 & the total of that will be the manufactoring cost.
, RE:
11/7/2012 3:18:48 PM
Class Thomas Ponce
The three types of manufacturing costs are direct materials, direct labor costs,
& overhead costs.
Direct materials costs are basically the materials that go into the finals
product & they’re typically called raw products.
Direct labor costs essentially is the as the name says, direct labor…the cost
for those who touch the product & that are directly involved in its process
from start to finish.
Overhead costs is pretty much everything else, it’s not really involved in the
processes of the development of the product. For instance the warehouse
would be considered as an overhead cost.
The product cost is the direct materials, direct labor, & overhead used in
making the products.
The period cost is not directly involved with the development of the product
but rather the presentation & condition of the product.
Thomas Professor Backman 11/8/2012 4:21:25 PM
Where would you find product costs & period costs on the income
statement & the balance sheet?
RE:
Thoma Thomas Ponce 11/9/2012 7:14:18 PM
s
Goods partially completed are a work-in-process... both are
part of inventory on the balance sheet. Raw materials appear
on the balance sheet as inventory as well.
RE:
Thoma Irene Turay 11/9/2012 4:36:33 PM
s
Systems - Discussion
Job Order Costing (graded)
The job cost sheet is used to accumulate the three product costs: direct material, direct labor, & factory
overhead. Discuss the source documents for determining these amounts (that is, where do we get these
numbers, & how we arrive at the overhead?). Why is overhead the most difficult to assign?
Responses
Responses are listed below in the following order: response, author & the date & time the
response is posted.
Response Author Date/Time
Class Professor Backman 11/2/2012 4:38:12 AM
I really appreciate the quality & depth of your thoughts in last week's discussion
thread. Thanks
Let's start by looking at the following areas:
1. Manufacturing costs are made up of three categories. List them & define or explain
at least one of them.
2. What is the difference between product & period costs? List some examples of
each.
RE:
11/11/2012 11:50:12 PM
Class Andrea Faye Estacio
Three categories of manufacturing costs are direct materials, direct labor, & overhead costs.
RE:
11/7/2012 6:19:26 PM
Class Alison Richards
, Since many have answered the three categories of manufacturing costs which
are direct materials, direct labor, & overhead costs I will focus majority of my
attention on distinguishing the difference between product & period costs.
When we think of product costs it is for certain that we are bringing to an
inclusion of all the given costs in association with the cost of acquiring the
product. Or the cost associated with the cost of making the product. This is
where the three categories of the manufacturing costs come into play. When
goods are purchased or manufactured the product cost remains with the
product, up until the point where it is no longer sitting in inventory awaiting a
sale. For this given reason this is why the product costs are given to
inventory account within a balance sheet. As stated above upon the sale, the
goods are no longer in inventory as it is viewed as an expense & matched
against sales revenue. At the time of conception product costs are not treated
as expenses. From this explanation this is why direct materials as well as
direct labor cost aren’t treated as an expense when it is incurred but when the
product is marked as sold. The easiest way to get a grasp around period costs
is to take everything being left out in the above in means of cost & this would
be the period costs. Period costs are simply not included in product costs.
Period costs are different as they are expenses upon the income statement for
the given period in which the cost was incurred. Period costs aren’t enclosed
in purchased or manufactured goods. Examples of such are selling a product
& the sales commission in place would represent the period cost. Another
example of period cost is the renting of an office space also.
RE:
11/8/2012 7:48:47 PM
Class Cadette Batie
Alison:
The job cost sheet is the central feature of a job order cost system. It is the place where all the manufacturing
costs come together into one location. The essence of a job cost sheet is the three types of manufacturing
costs, they are: direct labor, direct materials & manufacturing overhead. Before we go any further it is
important to define these three manufacturing costs. Direct labor represents the people who do the core work
of the business. For example if the business is a construction company, direct labor would be the people
actually constructing the building. You can essentially think of direct labor as the people who make or build
the product. Direct Materials are all of the materials that go into making a product, also known as raw
materials. They are subdivided into direct materials & indirect materials. Direct materials are the raw
materials that become part of the product. For example, bricks, shingles & bath tubs would be the direct
materials when building a house. Manufacturing overhead is very straight forward, if a cost is not direct labor
or direct materials the cost is overhead. In other words, overhead is a multitude of different costs including
indirect labor & indirect materials. Some examples include, electricity, property, taxes, advertising,
accounting, janitors & cleaning supplies.
A job cost sheet is useful when accompany typically works on custom or unique jobs. For example, suppose
a company builds custom luxury homes. Each house is different & requires different building materials in
different amounts. In addition, some houses will require more labor than other houses. The only way for a
company to know how much it is costing the company to build each individual house is to keep track of the
costs on a job cost sheet. A job cost sheet simply accumulates the costs for each job. & of course, there will
be a separate job cost sheet for each separate job. Often times the job cost sheet will be located right where
,the factory workers are located. In fact, sometimes the factory workers themselves will update the job cast
sheet as they work on a specific job. For example, a worker might write on the job cost sheet that the worker
worked 3 hrs on a particular job. Sometimes workers will use a time clock or other documentation to record
how much time is spent on a particular job. The time clock cards or other documentation, if used, are called
source documents. Source documents are simply a way to help office clerks enter information onto the job
cost sheets rather than having the factory workers enter the information. Again, how the information is
entered on to the job cost sheets all depends on what is easiest for the company.
Source:
http://academic.regis.edu/dbush/Accounting/Accounting%20Help/Job%20Cost
%20Accounting/job_cost_job_cost_sheet.htm
Cadette Professor Backman 11/11/2012 6:20:24 AM
Where would you find product & period costs on the income
statement?
RE: 11/11/2012 3:03:25
Cadette Cadette Batie PM
Prof;
You would find product cost on an income
statement in the Cost of Sales because this is where
you see the price of materials & inventory. Also
you find periodic cost on the income statement in
the General & Administrative Costs because this is
the majority of the periodic cost for things like
salaries & rent & insurance on the building that the
plant or factory is located. Income Statement
Basics
RE:
11/7/2012 6:41:28 PM
Class Irene Turay
Manufactoring cost is the cost of manufactoring company of making a
product consisting of direct matrial. Basically it means that how much its
going to cost a company to make a product, all their expenses. An example
would be direct material of a television $3000 labor cost $2000 & the
overhead is $2000 & the total of that will be the manufactoring cost.
, RE:
11/7/2012 3:18:48 PM
Class Thomas Ponce
The three types of manufacturing costs are direct materials, direct labor costs,
& overhead costs.
Direct materials costs are basically the materials that go into the finals
product & they’re typically called raw products.
Direct labor costs essentially is the as the name says, direct labor…the cost
for those who touch the product & that are directly involved in its process
from start to finish.
Overhead costs is pretty much everything else, it’s not really involved in the
processes of the development of the product. For instance the warehouse
would be considered as an overhead cost.
The product cost is the direct materials, direct labor, & overhead used in
making the products.
The period cost is not directly involved with the development of the product
but rather the presentation & condition of the product.
Thomas Professor Backman 11/8/2012 4:21:25 PM
Where would you find product costs & period costs on the income
statement & the balance sheet?
RE:
Thoma Thomas Ponce 11/9/2012 7:14:18 PM
s
Goods partially completed are a work-in-process... both are
part of inventory on the balance sheet. Raw materials appear
on the balance sheet as inventory as well.
RE:
Thoma Irene Turay 11/9/2012 4:36:33 PM
s
