Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen

Exercise 11

Interview an accountant who works for a service organization that uses job-order costing. For a small firm, you may need to talk to an owner/manager. Examples are a funeral home, insurance firm, repair shop, medical clinic, and dental clinic. Write a paper that describes the job- order costing system used by the firm. Some of the questions that the paper should address are:
a. What service(s) does the firm offer?
b. What document or procedure do you use to collect the costs of the services performed for each customer?
c. How do you assign the cost of direct labor to each job?
d. How do you assign overhead to individual jobs?
e. How do you assign the cost of direct materials to each job?
f. How do you determine what to charge each customer?
g. How do you account for a completed job?
As you write the paper, state how the service firm you investigated adapted the job-order accounting procedures described in this chapter to its particular circumstances. Were the differences justified? If so, explain why. Also, offer any suggestions you might have for improving the approach that you observed.