Cost Accounting System and Recommendation its Document

In the case, the given company produce holidays decoration and display and the manager
did not satisfied with timeliness of information and inventory measurement. I suggest that this
company should use event in job order costing to solve these problem. Before he/ she sign
contract with customer, he/she start must do job on this work. Firstly, manager should predict
cost to complete job. These cost depends on the product design that the customer or manager
assumes. Secondly, Manager negotiate a sales prices and decide to focus on this project. Sales
prices are influence by market price. Thirdly, Manager manage schedule time to meet customers
need with their company constraints. Finally, this scheduled time is complete, manager order raw
material and labor to complete jobs.
The document required for compete Event Job order Costing
Material Cost flows and Documents
After receiving raw materials, the employees count and inspect and record the items
quantity (for example: - paper, colors) and cost on a receiving report. These report include on
materials ledger card and general ledger. Materials ledger cards are perpetual records and
updated when units are purchase and issued for use in production (Wild & Shaw, 2012). From
material ledger card, data are move to two different places: Job Costs Sheet and Factory
Overhead Ledger. Direct material cost include in Job Costs Sheet and indirect material cost goes
to Factory Overhead Ledger.
Labor Cost flows and Document
This document is used to manage and control operation. Employee use clock cards to record the
number of hours work and serve source document to record labor cost. Total labor cost is record

in factory payroll and then it is record to labor account of Job Costs Sheet if labor is direct else
record to labor account of Factory Overhead Ledger.

Reference
Wild, J. & Shaw, K. (2012). Managerial Accounting. Columbia. Univ. of MI. ISBN-13-9780078110849