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What are Steps in job-order costing process?
In a job-order costing system, jobs are accounted for using the job-order cost sheet. The process involves the following steps:
1-Identification of the job
2-Tracing direct costs to the job
3-Identifying the indirect costs i.e. manufacturing overheads and finding the cost allocation base for each cost.
4-Applying the indirect costs to the job using the pre-determined allocation rate.
5-Finding total cost by summing up all the cost components.
6-Closing the under/over-applied manufacturing overheads to cost of goods sold/income statement.
7-Calculating revenue and profit.