Sample Essay on Chapter 3: Job-Order Costing for My Essay


Carpet World Pty Ltd is an Australia-based company that specializes in the export of woolen carpets from Australia to China. This is because China is a leading market for fine wool and wool products manufactured in Australia. While Western European market was the largest exporter of woolen products from Australia, the emergence of China as a leading global economic powerhouse has seen its demand for such luxury goods as woolen carpets increase significantly in recent years. Carpet World has thus endeavored to tap into this market.

The topic, Job-Order Costing, revolves around elements of the cost involved in a business entity for use in various forms of jobs, batches or products. It further entails tracing of direct labor costs and direct materials costs directly to specific jobs (Garrison, Noreen, and Brewer 144). The topic further gives examples of industries that utilize job-order costing such as construction, printing, hospitals, as well as professional services like movie studios, and law firms. It also explores aspects of a job-order costing system such as labor, job cost sheet, manufacturing overhead, and materials costs. Other areas covered by the topic include flows of cost, including recording of labor, materials, and manufacturing overheads (Garrison et al. 158). It further introduces over and under-applied overheads, and their causes. Other issues addressed by this topic are the approaches of handling an over-or underapplied overhead, and their effect on a business’s net operating income.

This topic would be useful to the business that Carpet World is involved in, in that it would facilitate calculation of predetermined overhead costs of products for application of overhead cost of products. In addition, the topic will enable me to prepare journal entries for their business in order to record costs. Finally, the knowledge gained form studying this topic will enable me to prepare schedules for manufacturing costs of various types of carpet at Carpet World, and the cost of goods sold.


Works Cited

Garrison, Ray, Eric Noreen and Peter Brewer. Managerial Accounting 15th Edition. New York:

McGraw-Hill Higher Education, 2014. Print.