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20 Videos (2h 5m)
    • Introduction

      3:00
    • Characteristics of Production Processes

      10:57
    • Setting up the Accounting System - Part 1

      8:57
    • Setting up the Accounting System - Part 2

      7:15
    • Setting up the Accounting System - Part 3

      3:31
    • Job-Order Costing System Description

      10:10
    • Job Order Costing: Direct Materials and Labour Costs

      5:35
    • Job Order Costing: Overhead and Finished Goods

      6:45
    • Job Order Costing: COGS and Nonmanufacturing Costs

      5:10
    • Single vs Multiple Overhead Rates

      5:07
    • Accounting for Spoilage in Job-Order Systems

      2:03
    • Process Costing Systems: Basic Concepts

      9:38
    • Process Costing with no Work-in-Process Inventories

      5:25
    • Process Costing with Ending Work-in-Process Inventories

      10:35
    • FIFO Costing Method

      8:24
    • Weighted Average Costing Method

      5:28
    • Treatment of Transferred-In Goods

      5:25
    • Operation Costing

      7:07
    • Accounting for Spoilage in Process Costing

      3:47
    • Closure

      0:28

About This Class

Learn to Calculate the Cost Flows Related to Product and Service Costing in Manufacturing and Service Environments!

The cost accounting system is set up to serve the company’s needs for cost accumulation, cost measurement, and cost assignment. In general, normal costing is preferred to actual costing in determining unit production costs. In normal costing, actual prime costs are assigned to units, but overhead is applied based on a predetermined rate. Job-order costing is used for both manufacturing and service firms that produce unique or heterogeneous products. Cost is accounted for by the individual job using a subsidiary account called the job-order cost sheet.

The use of process costing is complicated by the presence of work-in-process inventories. When work-in-process inventories are present, equivalent units must be used to measure output. Also, with beginning work-in-process inventories, we must decide what to do with prior-period work and prior-period costs. Two methods are described for dealing with beginning work-in-process inventories: the FIFO method and the weighted average method. The FIFO approach is theoretically appealing because it follows the process-costing principle: a period’s unit cost is computed by dividing the costs of the period by the output of the period. To accomplish this, prior-period work and costs must be excluded. This work and its costs must be tracked separately, creating some complexity in the approach. The weighted average approach is less complicated but poses some problems when control and accuracy issues are important.

You will learn:

  • You will be able to describe and calculate the cost flows associated with product and service costing, prepare journal entries, prepare departmental production reports using various methods, use multiple and single overhead rates, and handle spoilage.
  • You will be able to explain the difference between job-order and process costing.
  • You will understand the difference between the cost accounting systems of service and manufacturing firms and between unique and standardised products.
  • You will learn the relationship of cost accumulation, cost measurement, and cost assignment.
  • You will have the ability to describe the basic characteristics of process costing, including cost flows, journal entries, and the cost of production report.

By completing this course, you will be able to apply various product and service costing approaches and their methods in real production/service environment, and describe and prepare cost flows, journal entries, and cost of production reports.

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Krasimir Kirov

Operational Excellence Training