After studying this chapter, you should be able to . . .

1. Explain the types of costing systems
2. Explain the strategic role of costing
3. Explain the flow of costs in a job costing system
4. Explain the application of factory overhead costs in a job costing system
5. Calculate underapplied and overapplied overhead and show how it is accounted for
6. Explain an operation costing system
7. Explain how to handle spoilage, rework, and scrap a job costing system (appendix)