COST ACCOUNTING SYSTEMS

1. 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.

2. COST ACCOUNTING SYSTEMS There are two basic types of cost accounting systems: and Job Order Cost System Process Cost System

3. 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

4. Job Order Cost System • 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

5. Job Order Cost System

6. Process Cost System • Used 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.

7. Process Cost System

8. 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.

9. JOB ORDER COST FLOWSOverview

10. JOB ORDER COST FLOWSSystem

11. Materials Inventory Direct Labor Direct Labor Work in Process Inventory Cost of goods manufactured Factory Overhead Factory Overhead Finished Goods Inventory Overview of Job Order Costing Costs & Expenses Product Costs Balance Sheet Materials Purchases

12. Materials Inventory Direct Labor Direct Labor Work in Process Inventory Factory Overhead Factory Overhead Cost of Goods Sold Selling and Administrative Overview of Job Order Costing Costs & Expenses Product Costs Balance Sheet Materials Purchases Period costs flow directly to the income statement Income Statement Finished Goods Inventory Period Costs Selling and Administrative

13. SUMMARY OF JOB ORDER COST FLOWS

14. SUMMARY OF JOB ORDER COST FLOWS

15. 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

16. 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.

17. PROCESS COSTING COST FLOW Direct Materials Direct Labor Applied Overhead Picking Encapsulating Bottling Finished Goods

18. Job-Order CostingProcess Costing 1. Wide variety of distinct 1. Homogeneous products products 2. Cost accumulated by job 2. Costs accumulated by process or department 3. Unit cost computed by 3. Unit cost computed by dividing total job costs dividing process costs of by units produced on that the period by the units job produced in the period COMPARISON of JOB-ORDER andPROCESS COSTING

19. 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.

20. METODE PENENTUAN BIAYA PRODUKSI FULL COSTING Merupakan metode penentuan kos produksi yang memperhitungkansemua unsur biaya produksi ke dalam kos produksi ditambah biaya non produksi BBB + BTKL + BOP Fix + BOP Var Kos Non Produksi + Kos Produksi B. Adm Umum + B. Pemasaran

21. METODE PENENTUAN BIAYA PRODUKSI VARIABLE COSTING  Merupakan metode penentuan kos produksi yang hanya memperhitungkan biaya produksi yang berperilaku variabel kedalam kos produksi B. AD UM VAR BOP FIX B. MARK FIX BTKL B. AD UM FIX B. MARK VAR BBB BOP VAR

22. Contoh Isi Laporan Kos Produksi Perusahaan Tegel Cap GAJAH Lampiran A: Laporan Kos Produksi untuk tahun berakhir 31 Desember 2001 Sediaan tegel dalam proses, 1 Januari Pemakaian 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 dipakai Tenaga kerja langsung Overhead pabrik Gaji pengawas produksi Depresiasi bangungan-Pabrik Depresiasi mesin cetak dan pres Pemakaian bahan penolong Listrik dan air Asuransi-Pabrik Kos produksi masuk proses Sediaan tegel dalam proses, 31 Desember Kos barang manufakturan Rp 4.200.000 13.400.000 Rp17.600.000 3.800.000 Rp 2.140.000 850.000 1.500.000 840.000 357.000 152.000 235.000 Rp 2.450.000 13.800.000 7.490.000 6.074.000 Rp29.814.000 2.100.000 Rp27.714.000

23. FINANCIAL STATEMENTS forMANUFACTURING COMPANIES BALANCE SHEET INCOME STATEMENT Inventoriable Costs Sales Revenue Materials Inventory deduct when sales occur Finished Goods Inventory Cost of Goods Sold equals Gross Margin deduct Work in Process Inventory Operating Expenses Period Costs equals Operating Income

24. INCOME STATEMENT The income statement for a manufacturer is similar to that of a merchandiser except for the cost of goods sold section. CGS

25. 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.

26. Manufacturing Company Example • What is the cost of goods manufactured? Beginning work in process $ 20,000 Direct labor $100,000 Direct materials 70,000 Mfg. overhead 150,000 320,000 Ending work in process (18,000) Cost of goods manufactured $322,000

27. 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?

28. 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

29. 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

30. 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?

31. Manufacturing Company Example Gross margin $300,000 – Operating expenses 120,000 = Operating income $180,000