COST ACCOUNTING SYSTEMS

Cost accounting involves The measuring The recording, and The reporting of product costs

Consists of the various manufacturing costs that are fully integrated into the general ledger system.

An important feature is the use of a perpetual inventory system to provide

immediate, up-to-date information on the cost of a product.

COST ACCOUNTING SYSTEMS

There are two basic types of cost accounting systems:

and

a. Job order cost system

Provides a separate record for the cost of each quantity of product that passes through the factory

b. Process cost system

System in which costs are accumulated for each of the departments or processes within the factory

Costs are assigned to each job or batch

A job may be for a specific order or

inventory

A key feature:

Each job or batch has its own distinguishing characteristics

The objective: to compute the cost per job

Measures costs for each job completed - not for set time periods

Job Order Cost System

Job Order Cost System

Process Cost SystemUsed when a large volume of similar

products are manufactured. Cereal Automobiles Compact Discs Paint

Cost are accumulated for a specific time period (a week or a month)

Costs are assigned to departments or processes for a set period of time.

Process Cost System

JOB ORDER COST FLOWS

The cost flow parallels the physical flow of the materials as they are converted into finished goods.

Manufacturing costs are assigned to Work in Process.

Cost of completed jobs is transferred to Finished Goods Inventory.

When units are sold, the cost is transferred to Cost of Goods Sold.

JOB ORDER COST FLOWSOverview

JOB ORDER COST FLOWSSystem

Overview of Job Order CostingOverview of Job Order Costing

Product Costs

Costs & Costs & ExpensesExpenses Balance

Sheet

DirectLabor

DirectLaborDirectLabor

DirectLabor

Factory Overhead

Factory OverheadFactory Overhea

d

Factory Overhea

d FinishedGoods

Inventory

FinishedGoods

Inventory

Cost of goods manufactured

Work inProcessInventor

y

Work inProcessInventor

y

Materials

Inventory

Materials

Inventory

Materials

Purchases

Materials

Purchases

Cost of

Goods Sold

Cost ofGoods Sold

Product Costs

Period Costs

Costs & Costs & ExpensesExpenses Balance

Sheet

DirectLabor

DirectLaborDirectLabor

DirectLabor

Factory Overhead

Factory OverheadFactory Overhea

d

Factory Overhea

d FinishedGoods

Inventory

FinishedGoods

Inventory

Work inProcessInventor

y

Work inProcessInventor

yIncome Statement

Selling andAdministrati

ve

Selling andAdministrati

ve

Selling andAdministrati

ve

Selling andAdministrati

ve

Period costs flow directly to

the income statement

Period costs flow directly to

the income statement

Overview of Job Order CostingOverview of Job Order Costing

Materials

Inventory

Materials

Inventory

Materials

Purchases

Materials

Purchases

SUMMARY OF JOB ORDER COST FLOWS

SUMMARY OF JOB ORDER COST FLOWS

CHARACTERISTICS of PROCESS COSTING

• Homogeneous units pass through a series of similar processes.

• Each unit in each process receives a similar dose of manufacturing costs.

• Manufacturing costs are accumulated for a process for a given period of time

CHARACTERISTICS of PROCESS COSTING (continued)

• There is a work in process account for each process.

• Manufacturing cost flows and the associated journal entries are generally similar to job-order costing.

• The departmental production report is the key document for tracking manufacturing activity and costs.

• Unit costs are computed by dividing the departmental costs of the period by the output for the period.

PROCESS COSTING COST FLOW

Direct MaterialsDirect Labor

Applied Overhead

Picking Encapsulating Bottling

Finished Goods

COMPARISON of JOB-ORDER andPROCESS COSTING

Job-Order Costing Process Costing1. Wide variety of distinct 1. Homogeneous products

products

2. Cost accumulated by job2. Costs accumulated byprocess or department

3. Unit cost computed by 3. Unit cost computed bydividing total job costs dividing

process costs of by units produced on that the period by the units

job produced in the period

BASICS of OPERATION COSTING

Operation costing is a blend of job and process costing procedures applied to batches of homogeneous products. This costing system uses job-order procedures to assign materials costs to batches and process procedures to assign conversion costs.Work orders are used to collect production costs for each batch.

METODE PENENTUAN BIAYA PRODUKSI

FULL COSTINGMerupakan metode penentuan kos produksi yang memperhitungkan semua unsur biaya produksi ke dalam kos produksi ditambah biaya non produksi

BBB + BTKL + BOP Fix + BOP Var

Kos ProduksiB. Adm Umum + B. Pemasaran

+Kos Non Produksi

VARIABLE COSTING Merupakan metode penentuan kos produksi yang hanya memperhitungkan biaya produksi yang berperilaku variabel kedalam kos produksi

BBB

BTKL

BOP VAR

B. AD UMVAR

B. MARKVAR

BOP FIX

B. AD UMFIX

B. MARKFIX

METODE PENENTUAN BIAYA PRODUKSI

Contoh Isi Laporan Kos Produksi

Sediaan tegel dalam proses, 1 JanuariPemakaian semen dan pasir: Sediaan semen dan pasir, 1 Januari Pembelian semen dan pasir Bahan baku tersedia diproses Sediaan semen dan pasir, 31 Desember Bahan baku yg dipakaiTenaga kerja langsungOverhead pabrikGaji pengawas produksiDepresiasi bangungan-PabrikDepresiasi mesin cetak dan presPemakaian bahan penolongListrik dan airAsuransi-Pabrik Kos produksi masuk prosesSediaan tegel dalam proses, 31 Desember Kos barang manufakturan

Rp 4.200.00013.400.000

Rp17.600.0003.800.000

Rp 2.140.000850.000

1.500.000840.000357.000152.000235.000

Rp 2.450.000

13.800.0007.490.000

6.074.000Rp29.814.000

2.100.000Rp27.714.000

Perusahaan Tegel Cap GAJAHLampiran A: Laporan Kos Produksi

untuk tahun berakhir 31 Desember 2001

FINANCIAL STATEMENTS for MANUFACTURING COMPANIES

MaterialsInventory

FinishedGoods

Inventory

Sales Revenue

Cost ofGoods Sold

INCOME STATEMENT

Operating Expenses

InventoriableCosts

BALANCE SHEET

equals Operating Income

whensalesoccur

deduct

equals Gross Margindeduct

Work inProcess

Inventory

PeriodCosts

INCOME STATEMENT

The income statement for a manufacturer is similar to that of a

merchandiser except for the cost of goods sold section.

Manufacturing Company Example

The data of Kendall Manufacturing Company:

• Beginning and ending work-in-process inventories were $20,000 and $18,000.

• Direct materials used were $70,000.• Direct labor was $100,000.• Manufacturing overhead incurred was

$150,000.

• What is the cost of goods manufactured?

Beginning work in process $ 20,000Direct labor $100,000Direct materials 70,000Mfg. overhead 150,000 320,000Ending work in process (18,000)Cost of goods manufactured $322,000

Manufacturing Company Example

• Kendall Manufacturing Company’s beginning finished goods inventory was $60,000 and its ending finished goods inventory was $55,000.–How much is the cost of goods sold?

Manufacturing Company Example

Beg. finished goods inventory $ 60,000+ Cost of goods manufactured 322,000= Cost of goods available for sale$382,000– Ending finished goods 55,000= Cost of goods sold$327,000

Manufacturing Company Example

Manufacturing Company Example

• Kendall Manufacturing Company had sales of $627,000 for the period.–How much is the gross margin?

Sales $627,000– Cost of goods sold 327,000= Gross margin $300,000

Manufacturing Company Example

• Kendall Manufacturing Company had operating expenses as follows:

• $80,000 Sales salaries 10,000 Delivery expense

30,000 Administrative expenses $120,000 Total–What is Kendall’s operating income?

Manufacturing Company Example

Gross margin$300,000– Operating expenses 120,000= Operating income$180,000