Entries for Costs in a Job Order Cost System Munson Co. uses a job order cost system. The following data summarize the operations related to production for July: Materials purchased on account, $759,430 Materials requisitioned, $637,920, of which $82,930 was for general factory use Factory labor used, $782,210, of which $148,620 was indirect Other costs incurred on account for factory overhead, $182,260; selling expenses, $280,990; and administrative expenses, $167,070 Prepaid expenses expired for factory overhead, $34,930; for selling expenses, $29,620; and for administrative expenses, $21,260 Depreciation of office building was $101,760; of office equipment, $51,640; and of factory equipment, $34,930 Factory overhead costs applied to jobs, $432,880 Jobs completed, $1,002,450 Cost of goods sold, $972,070 Required: Journalize the entries to record the summarized operations. For a compound transaction, if an amount box does not require an entry, leave it blank. a. Materials purchased on account, $759,430. Entry Description Debit Credit a. fill in the blank 2 fill in the blank 4 b. Materials requisitioned, $637,920, of which $82,930 was for general factory use. Entry Description Debit Credit b. fill in the blank 6 fill in the blank 7 fill in the blank 9 fill in the blank 10 fill in the blank 12 fill in the blank 13 c. Factory labor used, $782,210, of which $148,620 was indirect. Entry Description Debit Credit c. fill in the blank 15 fill in the blank 16 fill in the blank 18 fill in the blank 19 fill in the blank 21 fill in the blank 22 d. Other costs incurred on account for factory overhead, $182,260; selling expenses, $280,990; and administrative expenses, $167,070. Entry Description Debit Credit d. fill in the blank 24 fill in the blank 25 fill in the blank 27 fill in the blank 28 fill in the blank 30 fill in the blank 31 fill in the blank 33 fill in the blank 34 e. Prepaid expenses expired for factory overhead, $34,930; for selling expenses, $29,620; and for administrative expenses, $21,260. Entry Description Debit Credit e. fill in the blank 36 fill in the blank 37 fill in the blank 39 fill in the blank 40 fill in the blank 42 fill in the blank 43 fill in the blank 45 fill in the blank 46 f. Depreciation of office building was $101,760; of office equipment, $51,640; and of factory equipment, $34,930. Entry Description Debit Credit f. fill in the blank 48 fill in the blank 49 fill in the blank 51 fill in the blank 52 fill in the blank 54 fill in the blank 55 fill in the blank 57 fill in the blank 58 g. Factory overhead costs applied to jobs, $432,880. Entry Description Debit Credit g. fill in the blank 60 fill in the blank 62 h. Jobs completed, $1,002,450. Entry Description Debit Credit h. fill in the blank 64 fill in the blank 66 i. Cost of goods sold, $972,070. Entry Description Debit Credit i. fill in the blank 68 fill in the blank 70
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Entries for Costs in a
Munson Co. uses a job order cost system. The following data summarize the operations related to production for July:
- Materials purchased on account, $759,430
- Materials requisitioned, $637,920, of which $82,930 was for general factory use
- Factory labor used, $782,210, of which $148,620 was indirect
- Other costs incurred on account for factory
overhead , $182,260; selling expenses, $280,990; and administrative expenses, $167,070 - Prepaid expenses expired for factory overhead, $34,930; for selling expenses, $29,620; and for administrative expenses, $21,260
Depreciation of office building was $101,760; of office equipment, $51,640; and of factory equipment, $34,930Factory overhead costs applied to jobs, $432,880- Jobs completed, $1,002,450
- Cost of goods sold, $972,070
Required:
a. Materials purchased on account, $759,430.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| a. | fill in the blank 2 | ||
| fill in the blank 4 |
b. Materials requisitioned, $637,920, of which $82,930 was for general factory use.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| b. | fill in the blank 6 | fill in the blank 7 | |
| fill in the blank 9 | fill in the blank 10 | ||
| fill in the blank 12 | fill in the blank 13 |
c. Factory labor used, $782,210, of which $148,620 was indirect.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| c. | fill in the blank 15 | fill in the blank 16 | |
| fill in the blank 18 | fill in the blank 19 | ||
| fill in the blank 21 | fill in the blank 22 |
d. Other costs incurred on account for factory overhead, $182,260; selling expenses, $280,990; and administrative expenses, $167,070.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| d. | fill in the blank 24 | fill in the blank 25 | |
| fill in the blank 27 | fill in the blank 28 | ||
| fill in the blank 30 | fill in the blank 31 | ||
| fill in the blank 33 | fill in the blank 34 |
e. Prepaid expenses expired for factory overhead, $34,930; for selling expenses, $29,620; and for administrative expenses, $21,260.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| e. | fill in the blank 36 | fill in the blank 37 | |
| fill in the blank 39 | fill in the blank 40 | ||
| fill in the blank 42 | fill in the blank 43 | ||
| fill in the blank 45 | fill in the blank 46 |
f. Depreciation of office building was $101,760; of office equipment, $51,640; and of factory equipment, $34,930.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| f. | fill in the blank 48 | fill in the blank 49 | |
| fill in the blank 51 | fill in the blank 52 | ||
| fill in the blank 54 | fill in the blank 55 | ||
| fill in the blank 57 | fill in the blank 58 |
g. Factory overhead costs applied to jobs, $432,880.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| g. | fill in the blank 60 | ||
| fill in the blank 62 |
h. Jobs completed, $1,002,450.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| h. | fill in the blank 64 | ||
| fill in the blank 66 |
i. Cost of goods sold, $972,070.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| i. | fill in the blank 68 | ||
| fill in the blank 70 |
Journal entries refers to the systematic approach of recording the business transactions in the books of accounting of a business. It is properly documented in the chronological order reflecting the correct date, amounts to be debited and credited, description of the transaction and a unique reference number.
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