This document discusses job order costing systems. It explains that job order costing accumulates costs for individual jobs or orders and uses a subsidiary ledger to track the costs of each job. It describes how direct materials, direct labor, and overhead costs are recorded for jobs and how journal entries are made to track costs in work in process and finished goods inventory accounts. Finally, it notes that job order costing information is used by management to estimate costs, set prices, develop budgets, compare actual to estimated costs, determine profitable jobs, and manage inventory.

1. SİPARİŞ MALİYET SİSTEMİ
Job Order Costing
Prof.Dr.Ahmet KIZIL

2. Learning Objectives
• Explain the difference between job order
and process costing systems
• Define actual, normal, and standard
costing valuation methods for job order
and process costing systems
• Explain when to use a job order costing
system
• Define what the term ‘job’ means

3. Learning Objectives
• Describe the documents and prepare the
journal entries in a job order costing
system
• Identify how technology is used in job
order costing systems
• Describe decisions that are made based
on job order costing information

4. Methods of Product Costing
• Product Costing System defines
– cost object
– method of assigning costs to production
• Valuation Method specifies
– how product costs will be measured

5. Valuation Methods
• Actual
– Actual direct material
– Actual direct labor
– Actual overhead
• Normal
– Actual direct material
– Actual direct labor
– Predetermined
overhead
• Standard
– Standard direct
material
– Standard direct labor
– Standard overhead

6. Costing Systems
Job order costing Process costing
COLA

7. Which Costing System?
Tax
Return

8. Job Order Costing System
• Each job is a cost object
• Accumulate costs for each job
• Use subsidiary ledger
WIP
Job 2
Job 1 Job 3
Job 1 + Job 2 + Job 3 = WIP
WIP Subsidiary Ledger
=
Job 1 100
Job 2 200
Job 3 500
Total 800
100 200 500

9. Malzeme Talep Fişi
Material Requisition Form
Cost of Direct Material
Work in Process Inventory (direct material)
Manufacturing Overhead (indirect material)
Raw Material Inventory

10. İşçilik Zaman Kartı
Employee Time Sheet
• Time worked on each job
• Cost of Direct Labor
Work in Process Inventory (direct labor)
Overhead (indirect labor)
Salaries and Wages Payable

11. Genel Üretim Giderleri
Overhead Costs
Overhead Account
Actual Overhead Applied Overhead
Overhead Costs
Work in Process Inventory
Overhead (actual or applied)

12. Job Order Cost Sheet
• All financial information about a job
– direct material (from material requisition)
– direct labor (from time sheets or labor tickets)
– overhead
• When job is complete, use job order cost
sheet to analyze actual costs to budgeted
costs

13. Completion of a Job
• Move job cost sheet from WIP subsidiary
to Finished Goods subsidiary
• Journal entry
Finished Goods Inventory
Work in Process Inventory

14. Sale
• Journal entry
Accounts Receivable
Sale
Cost of Goods Sold
Finished Goods Inventory

15. Journal Entries
D.Materials WIP-Job 1 FG
CGS
WIP-Job 2
Overhead
D.Labor
a a1
a2

16. Journal Entries
D.Materials WIP-Job 1 FG
CGS
WIP-Job 2
Overhead
D.Labor
a
a1
a2
b
b2
b1

17. Journal Entries
D.Materials WIP-Job 1 FG
CGS
WIP-Job 2
Overhead
D.Labor
a
a1
a2
b
b2
b1
c
c2
c1

18. Journal Entries
D.Materials WIP-Job 1 FG
CGS
WIP-Job 2
Overhead
D.Labor
a
a1
a2
b
b2
b1
c
c2
c1
a1 a1
b1 b1
c1 c1

19. Journal Entries
D.Materials WIP-Job 1 FG
CGS
WIP-Job 2
Overhead
D.Labor
a
a1
a2
b
b2
b1
c
c2
c1
a1 a1
b1 b1
c1 c1
a1
b1
c1
a1
b1
c1

22. Management Use of
Job Order Costing Systems
• Estimate future job costs
• Establish realistic bids and selling prices
• Develop budgets and standards
• Compare actual costs to estimated costs
• Determine which jobs are profitable
• Manage inventory