Page 202 - DCOM202_COST_ACCOUNTING_I

Cost Accounting – I

Notes Serial No. : ......................... Description of Job : .........................

Name of Customer : ......................... Quantity Ordered : .........................
Customer’s Reference No. : ......................... Operation Nos. : .........................
Date : ......................... Materials Requisition No. : .........................
Date of Commencement : ......................... Date of Completion : .........................
Operation Operation Quantity
Clock Time deptt. No.
No. No details Produced Rejected

Ordered by : ......................... Checked by : ......................... Approved by : ......................

Notes production order contains all the information regarding production. Several
copies of production order are prepared. These copies are generally in different colours
so as to distinguish them more easily. Copies of production order are sent to production
department, stores department, cost department, etc.

(vi) Recording of Costs: Cost is ascertained for each job separately. Costs are collected and
recorded for each job. The costing department collects the costs and records them in the job
cost sheet.
The sources of collection of various costs may be as under:

™ z Material Cost: Materials are classified into direct and indirect on the basis of traceability
of materials to the job. Materials may have to be purchased or requisitioned from
the stores. The documents necessary for collection of costs are the bills of materials,
suppliers invoices, good received notes, material requisition notes, material returned,
material transfer notes, etc.

™ z Direct Labour Cost: Direct labour costs are collected from operation schedule, job card
or labour/wages analysis sheet, etc.
™ z Direct Expenses: Direct expenses are collected from various expenses vouchers and
other records of job.
™ z Overheads: Overheads or indirect expenses are apportioned to the job in the usual
manner.

(vii) Completion of the Job: On completion of a job, the production department sends a
completion report of job to the costing department. On the basis of the report, the costing
department completes the job cost sheet and calculates profit or loss on each job. Actual
cost recorded in the job cost sheet is compared with the budgeted cost so as to reveal the
efficiency or inefficiency of operations.

(viii) Dispatch of Goods: The finished products are then packed and delivered to the customer
as per the delivery schedule. payment is settled as per the agreed mode of payment.

10.3 Preparation of Job Cost Sheet

A separate job cost sheet is prepared for every job undertaken. This is to facilitate the calculation
of cost of the job separately. The main idea of preparing job cost sheet is to show in detail the cost

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