(See related pages)
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Distinguish between process costing and job-order costing and identify companies that would use each costing method. |
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Identify the documents used in a job-order costing system. |
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Compute predetermined overhead rates and explain why estimated overhead costs (rather than actual overhead costs) are used in the costing process. |
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Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs. |
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Apply overhead cost to Work in Process using a predetermined overhead rate. |
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Prepare schedules of cost of goods manufactured and cost of goods sold. |
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Use T-accounts to show the flow of costs in a job-order costing system. |
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Compute underapplied or overapplied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. |
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(Appendix 3A) Understand the implications of basing the predetermined overhead rate on activity at capacity rather than on estimated activity for the period. |