Acct Ch. 15 - Part 1

A job cost sheet is a _______ record maintained for each job. This job cost sheet identifies the __________, the _____________ assigned, the _________, and key _____.

separate, customer, job number, product, dates

The principle of customization is equally applicable to both manufacturing and __________ companies. Most service companies meet customers' needs by performing a custom service for a specific customer.

service

A less common case occurs when management decides to begin work on a job before it has a signed contract. This is referred to as jobs produced on _____________.

speculation

If the projected target cost of the job as determined by job costing is too high, the producer can apply ________________________, which is a method of determining ways to reduce job cost until the target cost is met.

value engineering

Target cost is determined as follows:

Expected selling price − Desired profit = Target cost.

_____________________ consists of costs (other than direct materials and direct labor) that ensure the production activities are carried out.

Factory overhead

finished jobs file acts as a subsidiary ledger controlled by the _____________________ account.

Finished Goods Inventory

While a job is being produced, its accumulated costs are kept in ______________________ Inventory.

Goods in Process

The collection of job cost sheets for all jobs in process makes up a subsidiary ledger controlled by the _______________________________ account in the general ledger.

Goods in Process Inventory

Events in Job Order Costing Step 1: __________________________ Step 2: ____________________________ Step 3: _________________________

Predict the cost to complete the job, Negotiate price and decide whether to pursue the job, Schedule production of the job

When the job is finished, the company also prepares a journal entry that credits ______ and debits ______ (or Accounts Receivable).

Sales, Cash

A major aim of a job order cost accounting system is to determine the ______of producing each job or job lot.

cost

A __________________ system also provides timely information about inventories and manufacturing costs per unit of product. This is especially helpful for managers' efforts to control costs and determine selling prices.

cost accounting

When a finished job is delivered to a customer, the job cost sheet is moved to a permanent file supporting the total _______________________. This permanent file contains records from both current and prior periods.

cost of goods sold

Cost accounting systems accumulate _____ and then assign them to products and services.

costs

Some jobs are priced on a cost-plus basis: The customer pays the manufacturer for _______ incurred on the job plus a negotiated amount or rate of _______.

costs, profit

Job order costing is frequently used by manufacturers of __________________ or providers of custom services.

custom products

When a job is finished, its job cost sheet is completed and moved from the jobs in process file to the ______________ file.

finished jobs

Another feature of job order production is the diversity, often called __________________, of the products produced. Each customer order is likely to differ from another in some important respect.

heterogeneity

Some companies certify certain suppliers based on the quality of their materials. Goods received from these suppliers are not always ____________ by the purchaser to save costs.

inspected

The production activities for a customized product represent a _____.

job

Costs incurred on the job are immediately recorded on the ________________. When each job is complete, the supervisor enters the date of completion, records any remarks, and signs the sheet.

job cost sheet

Managers use ____________________ to monitor costs incurred to date and to predict and control costs for each job.

job cost sheets

When a job involves producing more than one unit of a custom product, it is often called a ________.

job lot

Many companies produce products individually designed to meet the needs of a specific customer. Each customized product is manufactured separately and its production is called _________ production.

job order

________________ production is the production of products in response to special orders.

job order

The cost of indirect materials flows from the _________________________ to the __________________ account in the factory overhead ledger, which is a subsidiary ledger controlled by the _______________________ account in the general ledger.

materials ledger card, Indirect Materials, Factory Overhead

Cost of direct materials flows from the _______________________ to the _________________.

materials ledger card, job cost sheet

When materials are needed in production, a production manager prepares a ____________________ and sends it to the materials manager the requisition shows the job number, the type of material, the quantity needed, and the signature of the manager authorized to make the requisition.

materials requisition

A cost accounting system records manufacturing activities using a perpetual inventory system, which continuously updates records for costs of ___________, ___________________, and _____________________.

materials, goods in process, finished goods inventories

A general accounting system records manufacturing activities using a ____________ inventory system.

periodic

Manufacturers that use job order costing typically base it on a ________________ system, which provides a continuous record of materials, goods in process, and finished goods inventories.

perpetual inventory

In nearly all job order cost systems, materials ledger cards (or files) are _____________ records that are updated each time units are ________ and each time units are issued for use in _____________.

perpetual, purchased, production

The initial event in a normal job order operation is the _______________________ for a custom product.

receipt of a customer order

When materials are first received from suppliers, the employees count and inspect them and record the items' quantity and cost on a _________________. The receiving report serves as the ________ document for recording materials received in both a materials ledger card and in the general ledger.

receiving report, source