CHAPTER 2 job order costing unit producing cost 17th edition managerial accounting

Sure, here's a concise description you could use for your managerial accounting Chapter 2 slide on job order costing:

"Chapter 2 focuses on job order costing, a vital method in managerial accounting for tracking costs and profitability on a per-job basis. This slide delves into the intricacies of job order costing, including its application in various industries, cost accumulation techniques, and how it aids in decision-making for managers."

1. CHAPTER 2 JOB ORDER COSTING 17 TH EDITION PRESENTED BY: SEJAL ANAND & M.AWAIS ASIGNED BY: MA’AM NADIA ANJUM

2. AGENDA SUKKUR IBA UNIVERSITY KANDHKOT CAMPUS 2 Measuring Direct Materials Cost Job Cost Sheet Measuring Direct Labor Cost Computing Predetermined Overhead Rates Applying Manufacturing Overhead Manufacturing Overhead Application of Manufacturing Overhead The Need for a POHR Examples

3. Measuring direct material cost DIRECT COST The cost of raw materials or components that can be directly traced to the production of a specific good or service . Think of it as the essential ingredients that go into making a product . Examples: For a toy manufacturer: Plastic used to make the toys, fabric for clothes, paint. For a bakery: Flour, sugar, eggs, butter. For a furniture maker: Wood, screws, nails.

4. A job cost sheet is a crucial document in a job order costing system, used to track and accumulate all the costs associated with a specific job or project. SUKKUR IBA UNIVERSITY KANDHKOT CAMPUS 4 JOB COST SHEET

5. SUKKUR IBA UNIVERSITY KANDHKOT CAMPUS 5 T he amount of payroll expenses paid to direct laborers on specific projects or working on specific products . Examples: Base Wage: $15/hour Fringe Benefits: $2/hour Payroll Taxes: $1/hour Total Work Hours: 40 hours/week Direct labor cost

6. SUKKUR IBA UNIVERSITY KANDHKOT CAMPUS 6 Computing Predetermined Overhead Rates A predetermined overhead rate is an estimated cost per unit of a chosen "allocation base" used to allocate manufacturing overhead costs to products. It allows companies to anticipate and distribute overhead costs before production even starts .

7. SUKKUR IBA UNIVERSITY KANDHKOT CAMPUS 7 Applying Manufacturing Overhead I t's the process of allocating estimated manufacturing overhead costs to individual products or jobs during production. This helps determine the total cost of production, which is crucial for pricing, profitability analysis, and cost control .

8. Manufacturing Overhead Manufacturing overhead, in simple terms, refers to all the indirect costs associated with the production process, but not directly traceable to a specific unit of product . Examples: Factory Rent/Utilities: The cost of operating the production facility. Depreciation of Machinery: The gradual decrease in the value of equipment used in production. Indirect Labor: Salaries of supervisors, quality control personnel, etc. Maintenance and Repairs: Costs associated with keeping equipment and facilities operational. Factory Supplies : Lubricants, cleaning materials, etc.

9. SUKKUR IBA UNIVERSITY KANDHKOT CAMPUS 9 Application of Menufecturing Overhead The Predetermined Overhead Rate (POHR) is the estimated overhead cost per unit of activity used to allocate overhead to products or services

10. 10 SUKKUR IBA UNIVERSITY KANDHKOT CAMPUS The Need for a POHR Cost Allocation Provides a standard method to allocate overhead costs to products or services Budgeting and Performance Evaluation Facilitates budgeting by estimating overhead costs in advance and enables performance evaluation through variance analysis. Accuracy in Product Costing Ensures more precise determination of total product costs for pricing and profitability analysis

11. Example SUKKUR IBA UNIVERSITY KANDHKOT CAMPUS 11 Pearl Co. applies overhead based on direct labor hours. Total estimated overhead cost for the year is $640,000. Total estimated labor cost is $1,400,000, and total estimated labor hours are 160,000. What is Pearl Co.’s predetermined overhead rate? If job No. 101 took 50 labor hours to complete, what is the overhead applied/charged to job 101?

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13. ABOUT US IBA University Kandhkot Campus The establishment of Sukkur IBA University has been a ray of hope for those who cannot afford quality education. Ranked as one of the best educational institutions in Pakistan, the university has been successfully transforming the students' lives and uplifting their careers. Sukkur IBA University has emerged as a beacon of light forth underprivileged talented youth with small pockets. Having national accreditation and collaboration all around the world, Sukkur IBAUniversity is now considered one of the best educational institutes in Pakistan.

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