ENGLISH ACCOUNTING

Process costing Process Costing Job-order Costing  Many different products are produced each period..  Many units of a single, homogeneous product flow evenly through a continuous p

Contents

• English for financial accounting

▫ Costing systems

▫ Cost – Volume – Profit analysis

▫ Budgeting

▫ Accounting information for decision making

• English for managerial accounting

• English for auditing

• Participation (10%)

• Mid-term exam (20%)

• Final exam (70%): CLOSED - BOOK

▫ Question 1: (2 marks) Fill in blanks (10 words)

▫ Question 2: (2 marks)

 Multiple choices (10 questions)

 Matching terms to definitions (5 terms)

▫ Question 3: (3 marks) Reading (3 short

answer questions)

▫ Question 4: (3 marks) An essay (200 words)

Job-Order Costing

Topic 1

Job-order costing vs Process

costing

Process Costing

Job-order Costing

 Many different products are produced each period

 Products are manufactured to order.

 Many different products are produced each period

 Products are manufactured to order.

 Many units of a single,

homogeneous product flow

evenly through a continuous

production process.

 One unit of product is

indistinguishable from any

other unit of product.

 Many units of a single,

homogeneous product flow

evenly through a continuous

production process.

 One unit of product is

indistinguishable from any

other unit of product.

Manufacturing

costs incurred Work – in - process Finished goods

Cost of goods sold

• Direct material cost

(Account # 621)

• Direct labor cost

(Account #622)

• Manufacturing

overhead (Acct #627)

• Account

#154

• Account

#155

• Account # 632

Manufacturing cost flows

Trace vs Allocate

Manufacturing overhead (OH) Allocated (Applied) to each

job using a predetermined overhead

rate

Manufacturing overhead (OH)

Allocated (Applied) to each

job using a predetermined overhead

rate

Traced

directly

to each job

Traced d

irectly

to each

job

The Job

Allocation base vs Cost driver

Allocation base: e.g Labor hours

Direct labor cost

Units produced

Machine hours

Labor

hours

Cost drivers

Actual cost system vs Normal cost

system

Actual

Overhead

Costs

Unit Cost

Unit Cost

Actual Costing

Actual direct labor cost

Actual direct materials costs

10

Actual cost system vs Normal cost system

Actual direct labor cost

Actual direct

activity required

by the unit X predetermined rate

Unit Cost

Unit Cost

Normal Costing

Predetermined

Overhead Rate =

Estimated total overhead costs Estimated total amount of allocation base

Overhead Application in a Normal

Costing System

Over-applied & Under-applied

Manufacturing Overhead

system

• Bill of materials

• Time ticket

• Job cost sheet

Schedule of cost of goods

manufactured

Schedule of cost of goods sold

End of Topic 1