Chapter 19, Problem S19.2SE

To determine

Cost flow under Job Order costing:

The Cost flow under job order costing start with the purchase of raw material for which raw material inventory account get added and then such material issued to production, for which raw material inventory account get reduced.

The material issued to production and other labour cost and manufacturing overheads applied shall be added to the production process (i.e. to in process inventory account) and which then get transferred to finished goods on its completion (work in process account get reduced).

The Cost of goods completed added to finished goods inventory as goods available for sale and which then actually sold get reduced from finished goods inventory and get added up as cost of goods sold and total of cost of goods sold is finally closed to income Statement to know the net income from operations.

The Determination of causes of increase or decrease in various accounts.