Page 5: Job Costing System

Gerald

Katherine

Armineh

Document or Report

• May be prepared by hand or printed by a computer

Off-Page Connector

• An entry from another page

OR

• An exit to another page

Display

• Information displayed by an online output device

• Ex: Monitor

Magnetic Disk

• Used for master files and databases

• Shows data stored permanently on a magnetic disk

Online Keying

• Shows data entry by an online device

• Ex: Personal Computer

Computer Processing

• Shows a computer-performed processing function

• Usually results in a change in data or information

Auxiliary Operation

• A processing function performed by a device that is not a computer

Job-Order Costing

• The process of tracking the expenses incurred on a job against the budget or estimate for that job

• Both direct and indirect costs are assigned to each open job

• The advantages of tracking such data is that it allows companies to build up a profile of projects undertaken, and improve their estimation report involved when similar projects are taken

Time Card or Labor Ticket

Materials requisition

Data entry and

verification

Data entry and

verification

Production labor

transaction file

Materials issuance

transaction file

Merge

To Payroll

Time Card or Labor

Ticket

• Used for employees paid on an hourly basis

• Records the employee’s arrival and departure time for each work shift

• Includes total hours worked during a pay period

Time Card or Labor Ticket

Materials requisition

Data entry and

verification

Data entry and

verification

Production labor

transaction file

Materials issuance

transaction file

Merge

To Payroll

Materials requisition

Authorizes the removal of the necessary quantity of raw materials from the storeroom to the factory location

Contains:1. Production order number

2. Date of issue

3. Part numbers and quantities of all necessary raw materials

Time Card or Labor Ticket

Materials requisition

Data entry and

verification

Data entry and

verification

Production labor

transaction file

Materials issuance

transaction file

Merge

To Payroll

Contains records for production labor during this period

Production labor

transaction file

Time Card or Labor Ticket

Materials requisition

Data entry and

verification

Data entry and

verification

Production labor

transaction file

Materials issuance

transaction file

Merge

To Payroll

Contains records for raw materials used during this period

Materials issuance

transaction file

Merge

Production cost

transaction file

(Actual)

Print

Materials and labor usage

report

Scrap and lost time report

Production cost

transaction file

(Actual)

• Contains records for the total production costs during this period

• Includes costs for both labor and materials

Merge

Production cost

transaction file

(Actual)

Print

Materials and labor usage

report

Scrap and lost time report

• Report showing the amount of labor and materials that were used

Materials and labor usage

report

Merge

Production cost

transaction file

(Actual)

Print

Materials and labor usage

report

Scrap and lost time report

• Report showing the amount of labor and materials that were lost or wasted

Scrap and lost time

report

Production cost

transaction file

(Actual)

Standard cost file

(Budgeted)

Standard cost variance analysis

Overhead analysis

Standard cost variance reports

Overhead residual

analysis report

Manufacturing Overhead file

(Actual)

Standard cost file

(Budgeted)

• Standard cost per unit for each variable

direct-cost input =

Standard input allowed for one output unit x Standard price per

input unit

• The costs which are budgeted prior to the production of any units the company will sell

• Covers budgeted direct materials, direct manufacturing labor, indirect costs, and manufacturing overhead

Production cost

transaction file

(Actual)

Standard cost file

(Budgeted)

Overhead analysis

Standard cost variance reports

Overhead residual

analysis report

Manufacturing Overhead file

(Actual)

Standard cost variance analysis

• Compares the budgeted direct-costs of production against the actual direct-costs of production as well as

indirect costs• Two types of Variance:

– Price Variance– Efficiency Variance

• Price Variance= (Actual Price of input-Budgeted) x Actual Quantity of Input

• Efficiency Variance=(Actual Quantity of input used- Budgeted)x Budgeted Price of input

2 Types of Variance:

Production cost

transaction file

(Actual)

Standard cost file

(Budgeted)

Standard cost variance analysis

Overhead analysis

Standard cost variance reports

Overhead residual

analysis report

Manufacturing Overhead file

(Actual)

Overhead analysis

• Compares actual overhead to what has

been budgeted• It helps to find the

variance between budgeted overhead and actual overhead

to help determine whether this is un/favorable

Productioncost

transaction file(Actual)

Costdistribution

ManufacturingOverhead file

(Actual)

Direct Materialfile

(Actual)

Direct Laborfile

(Actual)

•Pulls the data stored in the production cost transaction file, and separately allocates the direct materials, direct labor, and indirect costs.

• The indirect costs include both indirect materials and indirect labor, which are stored in the manufacturing overhead file.

• The direct material and direct labor costs are stored individually.

Cost Distribution

Production cost

transaction file

(Actual)

Direct Material File

(Actual)

Direct Labor File(Actual)

Manufacturing Overhead File

(Actual)

ManufacturingOverhead file

(Actual)

Direct Materialfile

(Actual)

Direct Laborfile

(Actual)

Overheadapplication

Open Jobfile

(WIP)

Job statusquery

PrintJob status

report

Pulls the stored data from the manufacturing

overhead, direct material and direct labor files and applies the data to the

open job file.Cost

allocation

ManufacturingOverhead file

(Actual)

Direct Materialfile

(Actual)

Direct Laborfile

(Actual)

Overheadapplication

Open Jobfile

(WIP)

Job statusquery

PrintJob status

report

Any job that is partially completed (also called

work in process).

Open Job File

(WIP)

ManufacturingOverhead file

(Actual)

Direct Materialfile

(Actual)

Direct Laborfile

(Actual)

Overheadapplication

Open Jobfile

(WIP)

Job statusquery

PrintJob status

report

When the open job file is updated, the system

displays the job status query to the monitor.

Job Status Query

ManufacturingOverhead file

(Actual)

Direct Materialfile

(Actual)

Direct Laborfile

(Actual)

Overheadapplication

Open Jobfile

(WIP)

Job statusquery

PrintJob status

report

With a print command, the job status report is

generated and printed.

Job status report

Time Card or Labor Ticket

Materials requisition

Data entry and

verification

Data entry and

verification

Production labor

transaction file

Materials issuance

transaction file

Merge

To Payroll

Threat

• Inaccurate Time Data– Increase labor expenses– Result in erroneous labor expense

reports

Time Card or Labor Ticket

Control

-Badge readers

-Bar code scanners

-Data entry program including:- Field checks- Limit checks- Validity checks

Time Card or Labor Ticket

Materials requisition

Data entry and

verification

Data entry and

verification

Production labor

transaction file

Materials issuance

transaction file

Merge

To Payroll

Threat

• Undocumented Lost Materials– Inflated inventory

Materials requisition

Control

-Badge readers

-Bar code scanners

Time Card or Labor Ticket

Materials requisition

Data entry and

verification

Data entry and

verification

Production labor

transaction file

Materials issuance

transaction file

Merge

To Payroll

Edit Checks

Control

Data entry and

verification