Please share relevant information (newspaper, magazine, website, etc.) found outside of class related to the objectives covered during class.
Students are required to communicate accounting information. Please write at least 400 words and apply concepts and teachings from the weekly readings. Whenever possible, try to relate the article to real-word applications from your work experiences. Please proofread for grammar and spelling and format your comments consistent with APA guidelines.
Please use
– explanatory and descriptive paragraphs and
– business letters and memoranda
Week 3 Study Guide: Product Costing Readings and Key Terms Ch. 15 of Accounting Cost accounting Job cost sheet Job order cost system Process cost system Hybrid cost system Ch. 16 Process costing Conversion costs Equivalent units Cost reconciliation sheet Weighted average and FIFO methods Ch. 17 Activity Cost pool Cost driver Just-in-time processing Content Overview Cost accounting systems Companies must know the cost of their products to ensure they are pricing their product appropriately to cover costs and be profitable. Product costs have three elements: direct materials, direct labor, and manufacturing overhead. In contrast, companies will have other costs that do not relate to production but to sales and administration. These costs are called period costs because they relate more to the fiscal year than to the products. Period costs are fully expensed in a fiscal year while product costs may be capitalized as inventory. To be profitable in the long-run, a company must cover all its costs—both product and period costs. Job order costing This is used by companies that make products or provide services that are individually unique, such as a custom print order, an accounting job, or custom furniture. A job order costing system will accumulate product costs—direct materials, direct labor, and manufacturing overhead—by individual job using a job cost sheet. Process costing This is used by companies that manufacture homogenous products such as petroleum, milk, and mass production automobiles. A process costing system will accumulated product costs—direct materials, direct labor, and manufacturing overhead—by process or by department. Hybrid costing Hybrid costing also called operations costing is a combination of job order and process costing used by companies that make products that have some customized and individualized features. Activity-based costing Activity-based costing is a modern method…
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