Contabilidad Financiera

Universidad Autonoma Del Caribe

Accounting For Decision Making
Charter II
Homework 09/19/2012

Lorena M Brieva

2.
(a) Distinguish between the two types of cost accounting systems.

There are two types of cost accounting systems: job order costs and process cost system. A company can measure the cost of a completed job. Such calculation is considered a ¨job order cost system¨.Whereas, a process cost system is used when a company is manufacturing a large number of products. This type of cost system is used when manufacturing is continuous.

(b) May a company us both types of cost accounting systems?

Yes, because according to the product if is big scale production or minimal production and according to the production level to decide which type of cost accountingsystem utilize

3. What type of industry is likely to use a job order cost system? Give some examples.

Give some examples. Under a job order cost system, the company assigns costs to each job or to each batch of goods. Some of the industries that likely use a job cost systems are: Custom Developers, Video productions, Printers, packaging companies and Custom furniture companies, plasticscompanies.

4. What type of industry is likely to use a process cost system? Give some examples.

A building company such as Lennar may be contracted to build a new condominium of residential homes. Lennar would count for their costs with the process cost system, because such a development involves continuous production. Also, the Pantene hair supply company would more than likely use the processcost system to account for their expenses because they engage in continuous mass production.

7. What source documents are used in accumulating direct labor costs?

Direct labor cost uses the following documents: time cards and time tickets.

10. What is the purpose of a job cost sheet?

The purpose of a job cost sheet is to determine the total and unit costs of the completed job and torecord the costs that are changeable to a specific job.

11. Indicate the source documents that are used in charging costs to specific jobs.

Changing Jobs and specific job have different source documents:

-materials requisition slips for direct

- Time tickets for direct labors

- The predetermined overhead rate for manufacturing overhead.

12. Explain the purpose and use of a“materials requisition slip” as used in a job order cost system.

Materials requisition slip is ¨a document authorizing the issuance of raw materials from the storeroom to production¨ (p62). In a job order costs: to issue materials from inventory to production, they must first approved. The materials requisition slip is the business document that permits said movement of materials. This slip is importantbecause it is the way by which businesses post to the materials inventory records and to the job cost sheet.

BE2-2 During January, its first month of operations, Lang Tool & Die accumulated the following manufacturing costs: raw materials $4,000 on account, factory labor $5,000 of which $4,200 relates to factory wages payable and $800 relates to payroll taxes payable, and utilities payable$2,000. Prepare separate journal entries for each type of manufacturing cost.

a) Raw materials inventory 4,000
Accounts Payable 4,000
(Purchases of raw materials on account)

b) Factory labor 5,000
Factory wages payable 4,200
Payroll taxes payable 800
(To record factory labors costs)

c) Manufacturing Overhead 2,000
Utilities payable2,000
(To record overhead costs)


BE2-3 In January, Lang Tool & Die requisition raw materials for production as follows: Job 1 $900, Job 2 $1,200, Job 3 $700 and general factory use $600. Prepare a summary journal entry to record raw materials used.

a) Work in process inventory 2,800
Manufacturing Overhead 600
Raw materials inventory...