Chapter 3: Job-Costing Systems

1. Source Documents

1.1. Job Cost Record

1.2. Materials Requisition Record

1.3. Labour Time Record

2. Transaction-By-Transaction Summary

3. Job-Costing and Process-Costing Systems

3.1. Job-Costing System

3.1.1. Step 1: Identify the job that is the chosen cost object.

3.1.2. Step 2: Identify the direct costs for the job.

3.1.3. Step 3: Identify the indirect-cost pools associated with the job.

3.1.4. Step 4: Select the cost-allocation base to use in allocating each indirect-cost pool to the job.

3.1.5. Step 5: Develop the rate per unit of the cost-allocation base used to allocate indirect costs to the job.

3.1.6. Step 6: Assign the costs to the cost object by adding all direct costs and all indirect costs.

3.2. Process-Costing System

4. Budgeting Indirect Costs and End-of-Period Adjustments

4.1. Underallocated Indirect Costs

4.2. Overallocated Indirect Costs

4.3. Adjusted Allocation Rate Approach

4.4. Proration

4.4.1. Method 1

4.4.2. Method 2

4.4.3. Method 3