which characteristic is the same in both job order costing systems and process costing systems? This is a topic that many people are looking for. bluevelvetrestaurant.com is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, bluevelvetrestaurant.com would like to introduce to you Process Costing versus Job Costing. Following along are instructions in the video below:
“Will be our first video in the nprocess costing series. Where we will be discussing discussing the differences between job ncosting and process costing. So let s first talk about costing as we ve ntalked. Before job.
Costing will have three. We can have three for example here nthree different work in process accounts for job 100 job 101 job 102 and each one nof. Those jobs will take a certain amount of product cost. Direct materials.
Direct nlabor and overhead..
Remember make up our product cost once. We ve completed those njobs. They moved into finished goods and we would simply sale the job as it nbecomes cost of goods sold now if we look at this into t accounts. We see nmaterials again move into work in process labor.
Whether it be direct and nindirect are credited to wages. Payable and applied to work in process. Remember. Nour materials and our labor.
Are both direct cost so they re directly ntraceable to a job and overhead is applied to work in process via some nallocation rate that we have that we have created based on estimates and a ncost driver..
Then once the job is completed it moves from work in process nwith a credit into finished goods with a debit then of course we sell the good we ncredit finished goods debit cost of goods sold so in job costing we can have nan individual work in process account for every job. Whereas in process costing nwe ll have a work in process account for processes that a product may have to go nthrough. So remember process. Costing is when we continually produce the exact nsame product over and over and over again for example number 2 pencils in nthis scenario.
Let s say we are creating jelly belly jelly beans. So the first nprocess a jelly bean has to go through is the center. We have to create the ncenter of the product first so in the center s process. We re going to need a ncertain amount of direct materials.
A certain amount of direct labor and ncertain amount of manufacturing overhead..
Then once the ncenter of the jelly belly is complete the center is then transferred to the nshells process. And the shells process. We need additional materials labor and noverhead because it s likely that we have different labor different people ncompleting. The shells process then were completing the center s process so we nhave different labor.
We probably have different types of materials and it may nbe in a different building altogether. So it may need different lights and machines and nthat type of thing. Then once the shells have been added to nthe jelly belly. They must be packaged so the completed nshelled jelly belly is moved to packaging.
Where we would likely need nmore materials..
More labor and overhead then once it goes through the final nprocess. It is transferred into finished goods. Where it then awaits to be sold nand once it s sold it s costed as cost of goods sold if we look at this process in t. Accounts.
We find again our materials move into each process as nthey re needed labor moves into each process as it is needed and overhead is napplied to each process as it is needed once the product gets through the final nprocess. It moves into finish goods and ” ..
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