No. Account Titles and Explanation Debit Credit 1. enter an account title to record raw materials purchases enter a debit amount enter a credit amount enter an account title to record raw materials purchases enter a debit amount enter a credit amount 2. enter an account title to record raw materials purchases enter a debit amount enter a credit amount enter an account title to record raw materials purchases enter a debit amount enter a credit amount (To record raw materials purchases) 3. enter an account title to record use of direct and indirect materials in production enter a debit amount enter a credit amount enter an account title to record use of direct and indirect materials in production enter a debit amount enter a credit amount enter an account title to record use of direct and indirect materials in production enter a debit amount enter a credit amount (To record use of direct and indirect materials in production) 4. enter an account title to record direct labor payroll enter a debit amount enter a credit amount enter an account title to record direct labor payroll enter a debit amount enter a credit amount (To record direct labor payroll ) 5. enter an account title to record indirect labor payroll enter a debit amount enter a credit amount enter an account title to record indirect labor payroll enter a debit amount enter a credit amount (To record indirect labor payroll) 6. enter an account title to record other manufacturing overhead incurred enter a debit amount enter a credit amount enter an account title to record other manufacturing overhead incurred enter a debit amount enter a credit amount (To record other manufacturing overhead incurred) 7. enter an account title to record factory depreciation enter a debit amount enter a credit amount enter an account title to record factory depreciation enter a debit amount enter a credit amount (To record factory depreciation) 8. enter an account title to apply manufacturing overhead enter a debit amount enter a credit amount enter an account title to apply manufacturing overhead enter a debit amount enter a credit amount (To apply manufacturing overhead) 9. enter an account title to record transfer of completed products to finished goods enter a debit amount enter a credit amount enter an account title to record transfer of completed products to finished goods enter a debit amount enter a credit amount (To record transfer of completed products to finished goods) 10. enter an account title to record cost of sales enter a debit amount enter a credit amount enter an account title to record cost of sales enter a debit amount enter a credit amount (To record cost of sales) 11. enter an account title to dispose of overapplied overhead enter a debit amount enter a credit amount enter an account title to dispose of overapplied overhead enter a debit amount enter a credit amount (To dispose of overapplied overhead)
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.
| 1. | The beginning balances in the inventory accounts were: | ||||||||||||
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| 2. | During the year, the company purchased raw materials costing $102,000. All purchases were made on account. | ||||||||||||
| 3. | The production department requisitioned $98,000 of raw materials for use in production. Of those, 70% were direct materials and 30% were indirect materials. | ||||||||||||
| 4. | The company used 21,500 direct labor hours at a cost of $13 per hour during the year (credit Wages Payable). | ||||||||||||
| 5. | The company used 6,400 indirect labor hours at a cost of $11 per hour (credit Wages Payable). | ||||||||||||
| 6. | The company paid $178,000 for insurance, utilities, and property taxes on the factory. | ||||||||||||
| 7. | The company recorded factory |
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| 8. | The company applied manufacturing overhead to inventory based on the 21,500 labor hours actually worked during the year. | ||||||||||||
| 9. | Products costing $661,000 were completed during the year and transferred to the Finished Goods Inventory. | ||||||||||||
| 10. | During the year, the company sold products costing a total of $678,000. | ||||||||||||
| 11. | The company closes under- and overapplied overhead to Cost of Goods Sold. |
(a)
New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct.
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No.
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Account Titles and Explanation
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Debit
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Credit
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1.
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enter an account title to record raw materials purchases
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enter a debit amount
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enter a credit amount
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enter an account title to record raw materials purchases
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enter a debit amount
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enter a credit amount
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2.
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enter an account title to record raw materials purchases
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enter a debit amount
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enter a credit amount
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enter an account title to record raw materials purchases
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enter a debit amount
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enter a credit amount
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(To record raw materials purchases)
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3.
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enter an account title to record use of direct and indirect materials in production
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enter a debit amount
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enter a credit amount
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enter an account title to record use of direct and indirect materials in production
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enter a debit amount
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enter a credit amount
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enter an account title to record use of direct and indirect materials in production
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enter a debit amount | enter a credit amount | |
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(To record use of direct and indirect materials in production)
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4.
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enter an account title to record direct labor payroll
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enter a debit amount
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enter a credit amount
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enter an account title to record direct labor payroll
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enter a debit amount
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enter a credit amount
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(To record direct labor payroll )
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5.
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enter an account title to record indirect labor payroll
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enter a debit amount
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enter a credit amount
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enter an account title to record indirect labor payroll
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enter a debit amount
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enter a credit amount
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(To record indirect labor payroll)
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6.
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enter an account title to record other manufacturing overhead incurred
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enter a debit amount
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enter a credit amount
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enter an account title to record other manufacturing overhead incurred
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enter a debit amount
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enter a credit amount
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|
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(To record other manufacturing overhead incurred)
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7.
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enter an account title to record factory depreciation
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enter a debit amount
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enter a credit amount
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enter an account title to record factory depreciation
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enter a debit amount
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enter a credit amount
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(To record factory depreciation)
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8.
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enter an account title to apply manufacturing overhead
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enter a debit amount
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enter a credit amount
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enter an account title to apply manufacturing overhead
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enter a debit amount
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enter a credit amount
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|
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(To apply manufacturing overhead)
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9.
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enter an account title to record transfer of completed products to finished goods
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enter a debit amount
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enter a credit amount
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enter an account title to record transfer of completed products to finished goods
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enter a debit amount
|
enter a credit amount
|
|
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(To record transfer of completed products to finished goods)
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10.
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enter an account title to record cost of sales
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enter a debit amount
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enter a credit amount
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enter an account title to record cost of sales
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enter a debit amount
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enter a credit amount
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|
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(To record cost of sales)
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11.
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enter an account title to dispose of overapplied overhead
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enter a debit amount | enter a credit amount |
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enter an account title to dispose of overapplied overhead
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enter a debit amount | enter a credit amount | |
| (To dispose of overapplied overhead) |
Introduction
Job order costing:
Job costing is also known as order costing. In this method of costing, goods and services are produced in specific job basis which means customized products are produced according to the specifications of customers. It is practiced mostly by ship builders, construction companies & home builders.
Here costs are identified with respective to specific job. It is a product cost under job costing and it includes direct material, direct labor, and manufacturing overhead. Entries for purchase of raw material on credit is
Raw material A/c DR
To accounts payable
Use of raw material [direct & indirect] for production, direct is transferred to work in process while indirect is transferred to manufacturing overhead.
Work in process A/c DR
Manufacturing overhead A/c DR
To raw material A/c
Labor cost of direct is charged to work in process while indirect to manufacturing overhead.
Work in process A/c DR
Manufacturing overhead A/c DR
To wages payable A/c
Depreciation for factory is charged to manufacturing overhead.
Manufacturing overhead A/c DR
To accumulated depreciation A/c
Factory overhead is applied at % of direct labor cost. Here factory overhead is charged to production of direct labor. Journal entry is as follows:
Work in process A/c DR
To manufacturing overhead A/c
Jobs completed and transferred to finished goods at cost, Journal entry is as follows:
Finished goods A/c DR
To work in process A/c
Jobs with a cost of goods sold transferred from finished goods to cost of goods sold. Entry is as follows:
Cost of goods sold A/c DR
To Finished goods A/c
Goods sold to customers for cash. Entry is as follows:
Cash A/c DR
To sales revenue A/c
Under or over applied manufacturing overhead A/c entry as follows:
Cost of goods sold A/c DR
To manufacturing overhead A/c [overapplied]
manufacturing overhead A/c DR
To Cost of goods sold A/c [underapplied]
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