Marshalls

Definition

Marshalls is a retail chain that operates on a job order costing system for its custom products. It tracks costs individually for each job to accurately allocate expenses and calculate profitability.

5 Must Know Facts For Your Next Test

1. Marshalls uses job order costing to manage and track the costs of custom orders separately from regular inventory.
2. Direct materials, direct labor, and manufacturing overhead are allocated to each specific job at Marshalls.
3. Job cost sheets are essential documents in Marshalls' accounting process, summarizing all costs associated with a particular job.
4. Overhead rates at Marshalls are predetermined and applied based on estimated costs before the actual costs are known.
5. Each job at Marshalls can have different production requirements, making it crucial to track individual job costs accurately.

Review Questions

• How does Marshalls allocate manufacturing overhead in its job order costing system?
• What document does Marshalls use to summarize all costs associated with a specific job?
• Why is it important for Marshalls to track individual job costs separately?

Related terms

Job Cost Sheet:

A record that details the materials, labor, and overhead costs for a specific job.

Direct Materials:

Raw materials that can be directly traced to the finished product.

Manufacturing Overhead:

Indirect factory-related costs that are incurred when producing a product.