Munson Co. uses a job order cost system. The following data summarize the operations related to production for July: Materials purchased on account, $582,620 Materials requisitioned, $489,400, of which $63,620 was for general factory use Factory labor used, $600,100, of which $114,020 was indirect Other costs incurred on account for factory overhead, $139,830; selling expenses, $215,570; and administrative expenses, $128,180 Prepaid expenses expired for factory overhead, $26,800; for selling expenses, $22,720; and for administrative expenses, $16,310 Depreciation of office building was $78,070; of office equipment, $39,620; and of factory equipment, $26,800 Factory overhead costs applied to jobs, $332,090 Jobs completed, $769,060 Cost of goods sold, $745,750 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, $582,620. Entry Description Debit Credit a. b. Materials requisitioned, $489,400, of which $63,620 was for general factory use. Entry Description Debit Credit b. c. Factory labor used, $600,100, of which $114,020 was indirect. Entry Description Debit Credit c. d. Other costs incurred on account for factory overhead, $139,830; selling expenses, $215,570; and administrative expenses, $128,180. Entry Description Debit Credit d. e. Prepaid expenses expired for factory overhead, $26,800; for selling expenses, $22,720; and for administrative expenses, $16,310. Entry Description Debit Credit e. f. Depreciation of office building was $78,070; of office equipment, $39,620; and of factory equipment, $26,800. Entry Description Debit Credit f. g. Factory overhead costs applied to jobs, $332,090. Entry Description Debit Credit g. h. Jobs completed, $769,060. Entry Description Debit Credit h. i. Cost of goods sold, $745,750. Entry Description Debit Credit i.
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, $582,620
- Materials requisitioned, $489,400, of which $63,620 was for general factory use
- Factory labor used, $600,100, of which $114,020 was indirect
- Other costs incurred on account for factory
overhead , $139,830; selling expenses, $215,570; and administrative expenses, $128,180 - Prepaid expenses expired for factory overhead, $26,800; for selling expenses, $22,720; and for administrative expenses, $16,310
Depreciation of office building was $78,070; of office equipment, $39,620; and of factory equipment, $26,800Factory overhead costs applied to jobs, $332,090- Jobs completed, $769,060
- Cost of goods sold, $745,750
Required:
a. Materials purchased on account, $582,620.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| a. | |||
b. Materials requisitioned, $489,400, of which $63,620 was for general factory use.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| b. | |||
c. Factory labor used, $600,100, of which $114,020 was indirect.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| c. | |||
d. Other costs incurred on account for factory overhead, $139,830; selling expenses, $215,570; and administrative expenses, $128,180.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| d. | |||
e. Prepaid expenses expired for factory overhead, $26,800; for selling expenses, $22,720; and for administrative expenses, $16,310.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| e. | |||
f. Depreciation of office building was $78,070; of office equipment, $39,620; and of factory equipment, $26,800.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| f. | |||
g. Factory overhead costs applied to jobs, $332,090.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| g. | |||
h. Jobs completed, $769,060.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| h. | |||
i. Cost of goods sold, $745,750.
| Entry | Description | Debit | Credit |
|---|---|---|---|
| i. | |||
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