Chapter 4
Job Order Costing
The job order eost procedure keeps
the costs of various jobs
or/contracts separate during their
manufacture or construction.
The cost unit is the job the work
order, or the contract: and the
records will show the cost of each
The cost of each order produced for
*Total cost is the basis ng pagdagdag o
a given customer or the cost of each
pagbawas ng final price ng product.
lot to be placed in stock is recorded
on a summary sheet called a job order
These forms used for materials and
cost sheet, or merely a cost sheet.
labor, numbered for the job to which
they apply, are totaled daily or
MAJOR SOURCE DOCUMENTS weekly and entered on the cost
FOR JOB COSTING sheets. If jobs constitute production
of a specific quantity for inventory,
Job-Order Cost Sheet job order costing permits
a. These records accumulate product computation of a unit cost for
costs of specific units or small inventory costing purposes.
batches of units for both product
Material Stock Card
costing and control purposes.
a. These records are the perpetual
b. The file of job-order sheets for
book inventory of costs and
uncompleted jobs serves as a
quantities of materials on hand.
perpetual book inventory and the
b. The file of materials stock cards
subsidiary ledger for Work in Process
for unused materials is the subsidiary
Control.
ledger for Materials Control.
c. A separate cost sheet is prepared
c. A separate stock card is prepared
for each job.
for each type of material on hand.
* Minimum and Maximum hindi pwede mag over
or mag under inventory
* request of stocks
Finished Goods Stock Card * same
sa materials and finished goods inventory
The balance of the Materials account
a. These records are the perpetual
represents the Materials inventory at
book inventory of costs and
the end of the period under
quantities of completed goods held
consideration. The amount should be
for sale.
equal to the total of the balances of
b. The file of finished goods stock
all the material stock cards.
cards for unsold goods is the
subsidiary ledger of Finished Goods
Purchase Request
Control.
Request presented to inventory
department
Factory Overhead Control Cost
Record *basis of Indirect Cost
Purchase Orders
a. actual These records accumulate
Issued by the department
detailed manufacturing overhead
costs by department.
Sale Invoice
b. The file of these records for the
Cash or cash in bank
accounting period is the subsidiary
Sale transaction
ledger for Factory Overhead Control.
nagpapautang / may balance ka pa
kaya SI binigay
Materials Requisition, Time
Ticket, and Clock Card *basis of
Indirect Cost
Official Receipt
a. As the source documents for Hindi nagpapautang
charging costs to jobs and Kapag bayad na lahat ng balanve OR
departments. na ibibigay
b. To aid in fixing responsibility for
control and usage of materials and ACCOUNTING PROCEDURES
labor FOR LABOR
In most factories, clock cards/time Accounting for Factory
records are used to record the days Overhead
or hours worked by each employee. is used to accumulate actual
These clock cards/time records are overhead incurred, while factory
used as the basis in computing the overhead applied is used to
gross earnings of employees who are accumulate estimated factory
paid hourly wages. In addition to overhead.
these clock cards, time tickets are
prepared for each worker to 1. Units of production
determine the time spent for each 2. Direct material cost
job as basis in determining the The higher the materials the
amount to be charged to direct labor higher the FO kaya nagging
cost and indirect labor cost. basis.
3. Direct labor hours
Mas maraming workers mas
maraming FO.
4. Direct labor cost
5. Machine hours
Estimated factory overhead (Factory
overhead applied) is used even if
At regular intervals, usually daily or there is actual factory overhead
weekly, the labor time and labor cost because at the time the overhead is
for each job are entered on the job needed for costing of jobs
order cost sheets. For each payroll completed, the actual overhead is not
period - weekly, every two weeks, or yet available (the actual will be known
monthly - the summary of employees' only at the end of the month).
earnings and the liability for payment
is journalized and posted to the
general ledger.
Work in Process Account
The work in process account is used
to charge the jobs with the direct
labor cost Factory overhead control
is charged for the indirect labor cost
incurred.
