4: Job Order Cost System
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- 4.1: Activity-Based Costing and Management
- This page discusses activity-based costing (ABC) and management (ABM) through the example of a movie theater ticket seller, emphasizing the arbitrary nature of cost allocation and the advantages of ABC in assigning costs based on actual activities. By examining employee time usage, management can enhance efficiency and gain insights into production costs, aiding decisions on pricing and product viability. However, implementing ABC requires increased effort and collaboration among teams.
- 4.2: Chapter 2 Study Plan
- This page outlines a study plan for job costing, emphasizing knowledge targets such as defining key terms and understanding concepts like applied overhead and cost of goods sold. Reasoning targets focus on tracking job costs and distinguishing overhead types, while skill targets include preparing journal entries, calculating overhead rates, and creating job costing-related financial statements.
- 4.3: Activity Based-Costing Method
- This page compares traditional costing and activity-based costing (ABC) methods. Traditional costing allocates overhead based on a single cost driver, demonstrated through High Challenge Company's analysis of $200,000 overhead for touring and mountain bicycles. It allocated $150,000 to touring and $50,000 to mountain bicycles.
- 4.4: Accounting in the Headlines
- This page discusses Virgin America's financial outlook, highlighting an expectation for profit in 2013 despite previous losses. In 2012, the airline reported revenues of $1.33 billion but incurred $1.36 billion in expenses, leading to a loss of $31.7 million. Major expenses include fuel, rent, wages, maintenance, and marketing. It suggests that by utilizing cost pools and activity-based costing, Virgin America can enhance cost control, internal financial management, and overall efficiency.
- 4.5: Chapter 2 Key Points
- This page summarizes job costing, detailing inventory accounts (Raw Materials, Work in Process, Finished Goods) and their effects on financial statements. It highlights job costs, covering direct materials, labor, and overhead, which is applied via a predetermined rate. Temporary accounts such as Factory Payroll and Overhead are reset regularly, and at the end of the period, actual and applied overhead are compared, necessitating potential adjustments to address discrepancies.
- 4.6: Glossary
- This page provides a glossary of key manufacturing cost terms, including actual overhead rate, cost drivers, and product costs. It covers direct and indirect costs related to labor, materials, and overheads, along with job cost systems. Key distinctions are made between finished goods and work in process, applied versus actual overhead, and the impact of period costs. Overall, it serves as a reference for understanding manufacturing accounting principles.
- 4.7: Chapter 2- Exercises
- This page provides a comprehensive review of managerial and financial accounting, focusing on short answer questions, exercises, and real-world applications. Key topics include accounting types, manufacturing costs, job costing systems, and overhead rates. It presents problems involving cost calculations, income statements, and ethical considerations in accounting.
