New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

Chapter 3 Notes

by: boilermaker2016

Chapter 3 Notes MGMT 201

GPA 3.4

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

These notes cover everything from chapter 2, specifically what was covered during lecture. The "red" text covers what was left out in the blanks.
Managerial accounting
David Scott
Class Notes
Accounting, Management, MGMT201, MGMT 201
25 ?




Popular in Managerial accounting

Popular in Business, management

This 2 page Class Notes was uploaded by boilermaker2016 on Wednesday March 2, 2016. The Class Notes belongs to MGMT 201 at Purdue University taught by David Scott in Spring 2016. Since its upload, it has received 9 views. For similar materials see Managerial accounting in Business, management at Purdue University.

Similar to MGMT 201 at Purdue

Popular in Business, management


Reviews for Chapter 3 Notes


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 03/02/16
Chapter 3 Product Costing and Cost Accumulation in a Batch Production Environment Product Costing • Switching gears from financial statement costs to operational costs Product Costing Systems • Accumulate the cost incurred in a production process and assigns the costs to the final products Types of Product Costing Systems Process Costing • Used for production of small, identical, low cost items • Mass produced in automated continuous production process • Costs cannot be directly traced to each unit of product • Typical process cost applications: o Paper mill o Oil refinery o Paint manufacturer Job-Order Costing • Used for production of large, unique high-cost items • Built to order rather than mass produced • Many costs can be directly traced to each job • 2 types: o Job shop operations – products manufactured one at a time or in very low volumes o Batch-production operations – Multiple products in batches of relatively small quantities Job Order Costing Typical job-order cost applications: • Special-order printing • Building construction Also used in the service industry • Hospitals • Law firms Accumulating Costs in a Job-Order Costing System • The primary document for tracking the costs associated with a given job is the Job Cost Record Predetermined Overhead Rate Timing • You don’t know the actual overhead costs until the year is over right • But jobs are completed (and sold) throughout the year = • Apply an estimate of overhead to jobs completed during the year so you can set the selling price correctly and make the journal entries along the way to account for the production process and product sales • POHR = Budgeted manufacturing overhead costs / Budgeted amount of cost driver • Overhead applied = POHR x Actual activity Walk Me Through It Please 1. Production Order for Job – Authorizes start of production process 2. Material Requisition – Indicates cost of direct material to charge to jobs and cost of indirect material to charge to overhead 3. Labor Time Record – Indicates cost of direct labor to charge to jobs and cost of indirect labor to charge to overhead 4. Application of Manufacturing Overhead – POHR x Actual activity Actual vs. Normal Costing • Most companies use normal costing, because using a total job costs sooner o Actual overhead for the period is not known until the end of the period A Little About Allocating A Little About Allocating Manufacturing Overhead • Allocating overhead to jobs is enhanced if multiple costing overhead to jobs is enhanced if multiple cost drivers are used that more closely align costs with activities • In this chapter we only used machine hours as the plant-wide overhead rate • But what if certain activities weren’t driven so much by machine hours, but rather, say, direct labor hours? o You end up with a misallocation of costs


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"

Anthony Lee UC Santa Barbara

"I bought an awesome study guide, which helped me get an A in my Math 34B class this quarter!"

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."


"Their 'Elite Notetakers' are making over $1,200/month in sales by creating high quality content that helps their classmates in a time of need."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.