Accounting › Section R · Job order and process costing › Topic R.4

Costing a job and fixing misapplied overhead

A finished job cost sheet tells managers what a job really cost and whether its price made sense. At year end, one more step remains: the overhead charged to jobs never quite matches the overhead actually spent, and the difference has to be cleared.

In this topic

  • Pulling a job's cost together
  • What a job cost sheet shows
  • Worked example: Job 302
  • Using the job cost
  • Underapplied and overapplied overhead
  • Worked example: underapplied at year end
  • Overapplied overhead
  • Worked example: prorating a large balance
  • Reading the balance
  • Common mistakes to avoid
  • Key takeaways

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