Munson Co. uses a job order cost system. The following data summarize the operations related to production for July: July 1 Materials purchased on account, $645,190 2 Materials requisitioned, $642,250, of which $72,680 was for general factory use 31 Factory labor used, $631,920, of which $91,350 was indirect 31 Other costs incurred on account for factory overhead, $153,030; selling expenses, $228,490; and administrative expenses, $150,890 31 Prepaid expenses expired for factory overhead, $29,630; for selling expenses, $26,950; and for administrative expenses, $17,150 31 Depreciation of office building was $88,610; of office equipment, $42,970; and of factory equipment, $31,120 31 Factory overhead costs applied to jobs, $373,200 31 Jobs completed, $966,650 31 Cost of goods sold, $848,470 CHART OF ACCOUNTS Munson Co. General Ledger ASSETS 110 Cash 121 Accounts Receivable 125 Notes Receivable 126 Interest Receivable 131 Materials 132 Work in Process 133 Factory Overhead 134 Finished Goods 141 Supplies 142 Prepaid Insurance 143 Prepaid Expenses 181 Office Building 191 Office Equipment 192 Accumulated Depreciation-Buildings and Equipment LIABILITIES 210 Accounts Payable 221 Utilities Payable 231 Notes Payable 236 Interest Payable 241 Lease Payable 251 Wages Payable 252 Consultant Fees Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends 390 Income Summary REVENUE 410 Sales 610 Interest Revenue Journalize the entries to record the summarized operations. Refer to the Chart of Accounts for exact wording of account titles. PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
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.
July | 1 | Materials purchased on account, $645,190 |
2 | Materials requisitioned, $642,250, of which $72,680 was for general factory use | |
31 | Factory labor used, $631,920, of which $91,350 was indirect | |
31 | Other costs incurred on account for factory |
|
31 | Prepaid expenses expired for factory overhead, $29,630; for selling expenses, $26,950; and for administrative expenses, $17,150 | |
31 | Depreciation of office building was $88,610; of office equipment, $42,970; and of factory equipment, $31,120 | |
31 | ||
31 | Jobs completed, $966,650 | |
31 | Cost of goods sold, $848,470 |
CHART OF ACCOUNTS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Munson Co. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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