| Course | ACC 349 Cost Accounting (ACC/349) |
|---|---|
| Week | 1 |
| Paper type | Cost terms and cost flow paper |
| Length | about 1,028 words, 4 double-spaced pages plus title page and references |
| Format | APA 7 student paper |
| School | University of Phoenix |
| Program | BS in Accounting |
| Updated | September 2026 |
Free sample paper for ACC 349 Week 1
Following Stainless Steel From the Receiving Dock to the Customer: Cost Terms, Job Costing and a Schedule of Cost of Goods Manufactured for a Composite Food-Service Equipment Fabricator
[Student Name]
University of Phoenix
ACC/349: Cost Accounting
Week 1 Assignment
[Instructor Name]
[Date]
The fabricator and all figures are composites written for a model paper; costing methods and research findings come from the sources listed.
A composite fabricator in an industrial park employs 46 people and builds stainless steel equipment for commercial kitchens: sinks, prep tables, wall shelves and exhaust hoods. Nearly every order is custom, sized to a restaurant's floor plan or a school's serving line. Because no two jobs are alike, the company uses job order costing and prices each job from an estimate. If the cost system cannot say what the last job actually cost, every estimate for the next one is a guess. This paper explains the cost terms the fabricator uses, follows one job through its accounts and prepares the schedule of cost of goods manufactured for a month.
Cost Terms Applied to the Shop
Direct materials are the stainless steel sheet, tubing and fittings that become part of a product and can be traced to a job. Direct labor is the time of welders, brake press operators and polishers working on a specific job. Manufacturing overhead covers every other cost of making products: supervisors' salaries, welding gas and wire, machine depreciation, plant utilities and the plant manager's time. Together, direct materials and direct labor are prime costs, while direct labor and overhead are conversion costs (Datar & Rajan, 2021).
Product costs are these three manufacturing costs; they attach to jobs and stay in inventory until the product is sold. Period costs, including the estimators' and salespeople's salaries, office rent and delivery trucks, are expensed in the month incurred. Behavior is a separate question. Steel and direct labor vary with the number of units built. Plant rent and supervisors' salaries are fixed across the shop's normal range of one shift.
Setting the Overhead Rate
Overhead cannot be traced to jobs, so it is applied with a rate set before the year begins. The fabricator budgeted $1,380,000 of overhead and 46,000 direct labor hours, a predetermined rate of $30 per direct labor hour. Labor hours were chosen because most overhead, supervision, welding supplies and equipment wear, follows the time welders and polishers spend on the floor. Banker et al. (1995) found that overhead in manufacturing plants was driven not only by volume but by complexity and transactions, a caution the company notes for later review.
Following One Job
In March, a school district ordered 24 prep tables for its central kitchen. The job was opened as Job 3-117.
Raw materials came first. The fabricator had purchased steel on account, debiting raw materials inventory and crediting accounts payable. When the shop pulled $18,400 of sheet and tubing for Job 3-117, the requisition moved that cost from raw materials to work in process.
Labor followed. Welders and polishers logged 520 hours on the job at an average of $31 an hour, $16,120, which was debited to work in process and credited to wages payable. Overhead was applied at $30 for each of those 520 hours, $15,600, debiting work in process and crediting manufacturing overhead. The job's total cost was $50,120, or about $2,088 per table.
When the tables passed final inspection, the job's cost moved from work in process to finished goods inventory. When they were delivered and billed, it moved from finished goods to cost of goods sold, and the sale was recorded separately at the contract price of $64,800.
The Month's Schedule of Cost of Goods Manufactured
For all of March, raw materials began at $142,000. Purchases were $231,000, and materials on hand at month end were $128,500, so materials used were $244,500. All of them were direct materials in this month. Direct labor was $132,000. Overhead applied at $30 per hour on 4,120 hours was $123,600. Total manufacturing costs added were $500,100.
Beginning work in process was $86,300, giving total work in process of $586,400. Ending work in process was $94,800, so cost of goods manufactured, the cost of jobs completed in March, was $491,600. Finished goods began at $38,200 and ended at $41,900, so cost of goods sold before any overhead adjustment was $487,900.
Actual Versus Applied Overhead
Actual overhead for the year turned out to be $1,412,000, while applied overhead was $1,368,000, because welding gas prices rose and labor hours ran slightly below budget. Overhead was underapplied by $44,000. Because the amount is about 3% of overhead, the company closes it to cost of goods sold. Had it been large, the difference would be prorated among the two inventory accounts and cost of goods sold according to the applied overhead sitting in each (Garrison et al., 2021). The underapplied amount also tells management something: the rate was set too low, so jobs were priced on costs lower than they turned out to be.
Why the Flows Matter
Johnson and Kaplan (1987) argued that cost systems designed for external reporting often failed managers because they averaged costs too broadly. The fabricator's job costing avoids some of that problem because each job carries its own materials and labor, but its single overhead rate still assumes all jobs use overhead in proportion to labor. Hoods, which need more machine time on the laser cutter, may be undercosted. A simple test would split overhead into two pools, one for the laser cutter and press brake applied by machine hours and one for everything else applied by labor hours, and compare the cost of a typical hood and a typical sink under each approach. If the difference is small, the single rate is good enough and cheaper to run. If hoods turn out several hundred dollars more expensive, the estimators have been underbidding them, and the company's recent success in winning hood contracts may be a sign of underpricing rather than of good service.
Conclusion
Costs at the fabricator travel from the materials storeroom to the shop floor, then to the finished goods cage and finally to the income statement, with overhead applied at a predetermined rate along the way. Knowing the terms and following the flow allow the company to cost each job, prepare its schedule of cost of goods manufactured and see from year-end overhead differences whether its estimates were sound.
References
Banker, R. D., Potter, G., & Schroeder, R. G. (1995). An empirical analysis of manufacturing overhead cost drivers. Journal of Accounting and Economics, 19(1), 115-137. https://doi.org/10.1016/0165-4101(94)00372-C
Datar, S. M., & Rajan, M. V. (2021). Horngren's cost accounting: A managerial emphasis (17th ed.). Pearson.
Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2021). Managerial accounting (17th ed.). McGraw Hill.
Johnson, H. T., & Kaplan, R. S. (1987). Relevance lost: The rise and fall of management accounting. Harvard Business School Press.
What the ACC 349 Week 1 instructions ask
ACC 349 Week 1 usually asks students to explain basic cost terms and show how costs move through a manufacturing company's accounts. Typical prompts cover direct and indirect costs, product and period costs, prime and conversion costs, fixed and variable behavior and the three inventory accounts of raw materials, work in process and finished goods. Many versions ask for a schedule of cost of goods manufactured or journal entries for a job order system, including overhead applied with a predetermined rate. Some add a short explanation of why costing matters for pricing. The written part should define each term through an example, show calculations step by step and cite the textbook and other sources in APA style.
How this ACC 349 Week 1 example is built
A custom fabricator suits the week because each order is a separate job, so costs can be traced to jobs through a clear sequence of accounts. The paper opens with the shop's costs sorted into categories with a sentence of reasoning each. It then sets the predetermined overhead rate from the annual budget and follows a single order, a set of prep tables for a school district, from steel requisition to shipment, showing the entry at each stage. A full-month schedule of cost of goods manufactured follows in prose so every figure can be checked. The last part explains year-end overhead differences and what they reveal about the budget used to set the rate.
ACC 349 Week 1 grading rubric: where the points go
Instructors typically assign marks for accurate definitions, correct classification of the company's costs and a cost flow that reconciles from start to finish. Schedules of cost of goods manufactured must include beginning and ending work in process correctly, and overhead must be applied with a rate based on budgeted figures rather than actual costs. Journal entries or account descriptions should move costs in the right order. Explanations that show why the distinctions matter, for example why a period cost never enters inventory, earn more than definitions alone. Clear layout of figures, logical headings, a professional tone and APA citations make up the remaining credit, and schedules that fail to balance cost the most.
ACC 349 Week 1 help: mistakes to avoid
A frequent ACC 349 Week 1 problem is using actual overhead instead of applied overhead in job costs, which makes each job's cost depend on when in the year it was built. Apply overhead with the predetermined rate and deal with the difference at year end. Another is placing selling or office costs in manufacturing overhead. Check each cost against the question of whether it is needed to make the product. Students also leave beginning or ending work in process out of the schedule of cost of goods manufactured. Walk through the schedule line by line and confirm that the final figure moves to finished goods. Finally, explain the terms through the company rather than a glossary.
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ACC 349 Week 1 questions, answered
What does ACC 349 Week 1 usually cover?
It usually covers cost terminology and cost flows: direct and indirect costs, product and period costs, fixed and variable behavior, the three manufacturing inventory accounts and often the schedule of cost of goods manufactured.
Where can I find a free ACC 349 Week 1 sample paper?
This page shows a complete fabricator example with the job cost flow and schedule worked out and margin notes beside each step. Give us your company or problem set and your first custom paper is free.
What is the difference between prime costs and conversion costs?
Prime costs are direct materials plus direct labor. Conversion costs are direct labor plus manufacturing overhead, the costs of turning materials into finished product.
What is a predetermined overhead rate?
It is budgeted manufacturing overhead divided by a budgeted activity base, such as direct labor hours or machine hours, set before the year begins and used to apply overhead to jobs.
What happens to underapplied overhead?
If actual overhead exceeds applied overhead, the difference is usually closed to cost of goods sold, or spread across work in process, finished goods and cost of goods sold if it is large.
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