Job Order Cost Accounting
description
Transcript of Job Order Cost Accounting
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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Job OrderCost Accounting
Chapter
1919
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Learning objectivesLearning objectives
1. Job Order Costing Accounting System
2. Job Order Cost Flows and Reports
3. Overhead and Overhead Application
4. Adjust Overapplied and Underapplied Overhead
5. Job Order Accounting Typical Journal Entries
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ProcessCosting
JobCosting
Used for production of large, unique, high-cost items.
Built to order rather than mass produced.
Many costs can be directly traced to each job.
Used for production of large, unique, high-cost items.
Built to order rather than mass produced.
Many costs can be directly traced to each job.
1. Job Order Costing Accounting System- Job Order Manufacturing
1. Job Order Costing Accounting System- Job Order Manufacturing
Chapter 20 Chapter 20
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Job Order ManufacturingJob Order Manufacturing
ProcessCosting
JobCosting
Typical job order cost applications: Special-order printing Building construction
Also used in service industry Hospitals Law firms
Typical job order cost applications: Special-order printing Building construction
Also used in service industry Hospitals Law firms
Chapter 20 Chapter 20
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Receive orders from customers.
Schedule Job.Schedule
jobs.
Orderraw materials.
Begin production
with material & Labor.
1. Job Order Costing Accounting System- Events in Job Order Costing
1. Job Order Costing Accounting System- Events in Job Order Costing
Predict Cost.
Negotiate Price
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Goods in ProcessJob B15Job B16Job B17Job B18 Job B19
Cost of GoodsSold
Job B15Job B16
Labor
Materials
Ind
irec
tIn
dir
ect
FinishedGoods Job B15Job B16Job B17
FactoryOverhead
Direct
Direct
Allocate
Events in Job Order CostingEvents in Job Order Costing
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The primary document for tracking the costs
associated with a given job is the job job
cost sheetcost sheet.
Let’s investigate
2. Job Order Cost Flows and Reports - Job Order Cost Documents
2. Job Order Cost Flows and Reports - Job Order Cost Documents
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Road Warriors Job Cost Sheet
Customer Carroll Connor Job No. B15Address 1442 High Point Dr. Portland, OregonJob Description Level I Alarm System on Ford Expedition Date promised 3/15/05 Dated started 3/3/05 Date completed
Direct Materials Direct Labor Factory OverheadDate Req. Cost Date Ticket Cost Date Rate Cost
Total Total Total
Remarks Cost SummaryDirect MaterialsDirect LaborFactory OverheadTotal Cost
Job Cost SheetJob Cost Sheet Exh. 19-2
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2. Job Order Cost Flows and Reports- Job Cost Sheet (Direct Material)2. Job Order Cost Flows and Reports- Job Cost Sheet (Direct Material) Exh.
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Road Warriors Job Cost Sheet
Customer Carroll Connor Job No. B15Address 1442 High Point Dr. Portland, OregonJob Description Level I Alarm System on Ford Expedition Date promised 3/15/05 Dated started 3/3/05 Date completed
Direct Materials Direct Labor Factory OverheadDate Req. Cost Date Ticket Cost Date Rate Cost
Total Total Total
Remarks Cost SummaryDirect MaterialsDirect LaborFactory OverheadTotal Cost
Let’s see one
A materials requisition is used to authorize the
use of materials on a job.
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Road Warriors Materials Requisition No. R-4705
Job No. B15 Date 3-7-05
Material Stock No. M-347
Material Description Alarm system wiring
Quantity Requested 1 Requested By
Quantity Provided 1 Date Provided 3-7-05
Filled By Received By
Remarks
C. Luther
C. Luther
M. Batemen
Materials RequisitionMaterials Requisition Exh. 19-5
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Materials RequisitionMaterials Requisition
Exh. 20-5
Road Warriors Materials Requisition No. R-4705
Job No. B15 Date 3-7-05
Material Stock No. M-347
Material Description Alarm system wiring
Quantity Requested 1 Requested By
Quantity Provided 1 Date Provided 3-7-05
Filled By Received By
Remarks
C. Luther
C. Luther
M. Batemen
Cost of material is charged to
Job B15.
Properauthorization
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Materials RequisitionMaterials Requisition
Exh. 20-5
Road Warriors Materials Requisition No. R-4705
Job No. B15 Date 3-7-05
Material Stock No. M-347
Material Description Alarm system wiring
Quantity Requested 1 Requested By
Quantity Provided 1 Date Provided 3-7-05
Filled By Received By
Remarks
C. Luther
C. Luther
M. Batemen
Type and quantity of material charged to
Job B15.
Pre-printed, sequentially numbered
form.
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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Materials RequisitionMaterials Requisition
Exh. 20-5
Road Warriors Materials Requisition No. R-4705
Job No. B15 Date 3-7-05
Material Stock No. M-347
Material Description Alarm system wiring
Quantity Requested 1 Requested By
Quantity Provided 1 Date Provided 3-7-05
Filled By Received By
Remarks
C. Luther
C. Luther
M. Batemen
The materials requisition form also serves as the source document for recording material
usage in the accounting records.
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Road Warriors Materials Ledger Card
Item Alarm sys. wiring Stock No. M-347 Location Bin137
Maximum Qty. 5 units Minimum Qty. 1 unit Reorder Qty. 2 units
Received Issued BalanceRec. Unit Total Req. Unit Total Unit Total
Date Rep. Units Cost Cost No. Units Cost Cost Units Cost Cost1 $225 $225
3/4/05 C7117 2 $225 $450 3 $225 $6753/7/05 R4705 1 $225 $225 2 $225 $450
Materials Ledger CardMaterials Ledger Card Exh. 19-4
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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Road Warriors Job Cost Sheet
Customer Carroll Connor Job No. B15Address 1442 High Point Dr. Portland, OregonJob Description Level I Alarm System on Ford Expedition Date promised 3/15/05 Dated started 3/3/05 Date completed
Direct Materials Direct Labor Factory OverheadDate Req. Cost Date Ticket Cost Date Rate Cost3/7/05 R4705 $225
Total $225 Total Total
Remarks Cost SummaryDirect Materials $225Direct LaborFactory OverheadTotal Cost
Job Cost Sheet (Direct Material)Job Cost Sheet (Direct Material) Exh. 19-2
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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GENERAL JOURNAL Page 21
Date DescriptionPost. Ref. Debit Credit
Mar 7 Goods in Process Inventory - Job B15 225
Raw Materials Inventory - M - 347 225
To record require & use of direct material alarm system wiring.
Factory Overhead 50
Raw Material Inventory 50
To record require & use of indirect material.
Job Order CostingTypical Accounting Entries (Direct & Indirect Material)Job Order CostingTypical Accounting Entries (Direct & Indirect Material)
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Road Warriors Job Cost Sheet
Customer Carroll Connor Job No. B15Address 1442 High Point Dr. Portland, OregonJob Description Level I Alarm System on Ford Expedition Date promised 3/15/05 Dated started 3/3/05 Date completed
Direct Materials Direct Labor Factory OverheadDate Req. Cost Date Ticket Cost Date Rate Cost3/7/05 R4705 $225
Total $225 Total Total
Remarks Cost SummaryDirect Materials $225Direct LaborFactory OverheadTotal Cost
Accumulate direct labor
costs by means of a
work record, such as a time ticket, for each
employee.
Let’s see one
2. Job Order Cost Flows and Reports - Job Cost Sheet (Direct Labor)2. Job Order Cost Flows and Reports - Job Cost Sheet (Direct Labor) Exh.
19-2
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Road Warriors Time Ticket No. L-3479
Job No. B15 Date 3/8/05
Employee Name T. Zeller Employee Number 3969
TIME AND RATE INFORMATION:
Start Time 9:00 Finish Time 12:00
Elapsed Time 3.0 Hourly Rate $20.00 Total Cost $60.00
Approved By
RemarksC. Luther
Labor Time TicketLabor Time Ticket Exh. 19-7
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Road Warriors Job Cost Sheet
Customer Carroll Connor Job No. B15Address 1442 High Point Dr. Portland, OregonJob Description Level I Alarm System on Ford Expedition Date promised 3/15/05 Dated started 3/3/05 Date completed
Direct Materials Direct Labor Factory OverheadDate Req. Cost Date Ticket Cost Date Rate Cost3/7/05 R4705 $225 3/8/05 L3479 $60
Total $225 Total $60 Total
Remarks Cost SummaryDirect Materials $225Direct Labor 60Factory OverheadTotal Cost
Job Cost Sheet (Direct Labor)Job Cost Sheet (Direct Labor) Exh. 19-2
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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GENERAL JOURNAL Page 21
Date DescriptionPost. Ref. Debit Credit
Mar 8 Goods in Process - Job B15 60
Factory Payroll 60
To record direct labor of 3 hours ($20 hour rate) used for Job B15.
Factory Overhead 100
Factory Payroll 100
To record indirect labor of 5 hours ($20 hour rate).
Job Order CostingTypical Accounting EntriesJob Order CostingTypical Accounting Entries
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Road Warriors Job Cost Sheet
Customer Carroll Connor Job No. B15Address 1442 High Point Dr. Portland, OregonJob Description Level I Alarm System on Ford Expedition Date promised 3/15/05 Dated started 3/3/05 Date completed
Direct Materials Direct Labor Factory OverheadDate Req. Cost Date Ticket Cost Date Rate Cost3/7/05 R4705 $225 3/8/05 L3479 $60
Total $225 Total Total
Remarks Cost SummaryDirect Materials $225Direct Labor 60Factory OverheadTotal Cost
Assign manufacturing overhead to jobs using a predetermined overhead rate based on direct
labor cost.Let’s do it
2. Job Order Cost Flows and Reports - Job Cost Sheet (Factory Overhead)2. Job Order Cost Flows and Reports - Job Cost Sheet (Factory Overhead)Exh.
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Job Cost Sheet (Factory Overhead)Job Cost Sheet (Factory Overhead)Road Warriors Job Cost Sheet
Customer Carroll Connor Job No. B15Address 1442 High Point Dr. Portland, OregonJob Description Level I Alarm System on Ford Expedition Date promised 3/15/05 Dated started 3/3/05 Date completed 3/11/05
Direct Materials Direct Labor Factory OverheadDate Req. Cost Date Ticket Cost Date Rate Cost3/7/05 R4705 $225 3/8/05 L3479 $60 3/8/05 160% $96
Total $225 Total $60 Total $96
Remarks Cost SummaryDirect Materials $225Direct Labor 60Factory Overhead 96Total Cost $381
Exh. 19-2
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Road Warriors uses a predetermined overhead rate (POHR) based on direct labor cost to apply overhead to jobs.
Estimated total manufacturingoverhead cost for the coming period
Estimated total direct labor costsfor the coming period
POHR =
POHR = = 160% of direct labor $$200,000
$125,000
Predetermined OverheadAllocation Rate FormulaPredetermined OverheadAllocation Rate Formula
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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GENERAL JOURNAL Page 21
Date DescriptionPost. Ref. Debit Credit
Mar 8 Goods in Process - Job B15 96
Factory Overhead 96
To apply overhead to Job B15 using a
predetermined overhead rate
Job Order CostingTypical Accounting EntriesJob Order CostingTypical Accounting Entries
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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Let’s summarize the document flow we have
been discussing in a job-order
costing system.
Job Cost CostingDocument Flow Summary
2. Job Order Cost Flows and Reports
- Cost Flows and Documents2. Job Order Cost Flows and Reports
- Cost Flows and Documents
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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Materials Ledger CardsMaterials
Ledger CardsMaterials Ledger CardsMaterialsRequisition
Direct materials
The materials requisition
indicates the cost of direct materials
to charge tojobs
and the cost of indirect materials
to charge to overhead.
Indirect materials
Job Cost Sheets
Job Cost Sheets
Job Cost Sheets
Job Cost Sheets
Factory Overhead Account
Cost Flows and DocumentsCost Flows and Documents Exh. 19-3
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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Employee time tickets indicate
the cost of direct laborto charge to
jobsand the cost
of indirect labor to charge to
overhead.
Job Cost Sheets
Factory Overhead Account
Job Cost Sheets
Job Cost Sheets
Job Cost Sheets
Direct Labor
Indirect Labor
Employee Time TicketEmployee Time
TicketEmployee Time TicketEmployee Time
Ticket
Job Cost CostingDocument Flow SummaryCost Flows and DocumentsCost Flows and Documents Exh.
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McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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Let’s examine the cost flows in a job
order system.We will use
T-accounts and start with materials.
2. Job Order Cost Flows and Reports - Summary of Cost Flows2. Job Order Cost Flows and Reports - Summary of Cost Flows
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MaterialPurchases
DirectMaterial
DirectMaterial
Summary of Cost FlowsSummary of Cost Flows Exh. 19-11
Raw Materials Goods in Process
Factory Overhead
ActualOverhead
Costs
Indirect Material
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Next let’s add labor costs and applied factory overhead to the job order cost flows. Are you
with me?
Summary of Cost FlowsSummary of Cost Flows
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Incurred DirectMaterial
Actual Applied factory factoryoverhead overhead
=/an adjustment is needed.
We will look at how to accomplish this later.
When
Flow of All Job Order Costs
Summary of Cost FlowsSummary of Cost Flows Exh. 19-11
Goods in ProcessFactory Payroll
Factory Overhead
DirectLabor
DirectLabor
Indirect Labor
ActualOverhead
Costs
Overhead
OverheadApplied to
Work inProcess
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Now let’s complete the
goods and sell them. Still with
me?
Summary of Cost FlowsSummary of Cost Flows
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DirectMaterialDirectLabor
Overhead
Cost ofGoodsMfd.
Cost ofGoodsMfd.
Cost ofGoodsSold
Cost ofGoodsSold
Summary of Cost FlowsSummary of Cost Flows Exh. 19-11
Goods in Process Finished Goods
Cost of Goods Sold
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Adjusting Entries
Vouchers
Indirect Labor
Indirect Material
Job Cost CostingDocument Flow Summary3. Overhead and Overhead Application3. Overhead and Overhead ApplicationExh.
19-6
Factory Overhead Account
Job Cost Sheets
Predetermined Overhead Rate
Factory Overhead Account: Temporary Account, accumulate cost until allocated to Jobs
Overhead is not directly associate with specific jobs
Allocate estimated overhead to jobs with predetermined overhead rate
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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We multiply the POHRtimes the number of
activity units (direct labor cost for Road Warriors)
incurred for the job.
Tell me again how we use the POHR to
assign overhead to jobs.
Overhead ApplicationOverhead Application
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I don’t get it!Show me an
example.
We multiply the POHRtimes the number of
activity units (direct labor cost for Road Warriors)
incurred for the job.
Overhead ApplicationOverhead Application
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If FishCo budgets overhead at $200,000 andestimates its activity to be 25,000 direct labor hours for 2005, what is the POHR per direct
labor hour?
a. $10.00 per hour
b. $ 6.00 per hour
c. $ 8.00 per hour
d. $12.00 per hour
If FishCo budgets overhead at $200,000 andestimates its activity to be 25,000 direct labor hours for 2005, what is the POHR per direct
labor hour?
a. $10.00 per hour
b. $ 6.00 per hour
c. $ 8.00 per hour
d. $12.00 per hour
QuestionQuestion
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
19-38
If FishCo budgets overhead at $200,000 andestimates its activity to be 25,000 direct labor hours for 2005, what is the POHR per direct
labor hour?
a. $10.00 per hour
b. $ 6.00 per hour
c. $ 8.00 per hour
d. $12.00 per hour
If FishCo budgets overhead at $200,000 andestimates its activity to be 25,000 direct labor hours for 2005, what is the POHR per direct
labor hour?
a. $10.00 per hour
b. $ 6.00 per hour
c. $ 8.00 per hour
d. $12.00 per hour
Estimated Overhead Estimated Activity
$200,000 25,000 hours
POHR = $8.00 per hour
QuestionQuestion
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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If FishCo actually worked 24,000 direct labor hours for 2005, what amount of overhead
would be assigned to jobs in goods in process?
a. $200,000
b. $192,000
c. $208,000
d. $196,000
If FishCo actually worked 24,000 direct labor hours for 2005, what amount of overhead
would be assigned to jobs in goods in process?
a. $200,000
b. $192,000
c. $208,000
d. $196,000
QuestionQuestion
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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If FishCo actually worked 24,000 direct labor hours for 2005, what amount of overhead
would be assigned to jobs in goods in process?
a. $200,000
b. $192,000
c. $208,000
d. $196,000
If FishCo actually worked 24,000 direct labor hours for 2005, what amount of overhead
would be assigned to jobs in goods in process?
a. $200,000
b. $192,000
c. $208,000
d. $196,000
24,000 hours × $8.00 per hour = $192,000
QuestionQuestion
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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Overhead and Overhead ApplicationOverhead and Overhead Application
Overhead is notincurred uniformly
during the year.
Actual overhead ratemight vary from month to month.
Predetermined ratemakes it possible to
estimate job costs sooner.
Reasons for using apredetermined overhead rate
Reasons for using apredetermined overhead rate
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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The result will be either underapplied or overapplied
overhead and wewill adjust Cost of Goods
Sold at the end of the period.
Here, let me show you.
The POHR is basedon estimates.
What happens ifactual results differfrom the estimates?
4. Adjusting of Overapplied & Underapplied Overhead4. Adjusting of Overapplied & Underapplied Overhead
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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Overhead is overapplied.
Overhead is overapplied.
Overheadapplied to
Work in Process
(POHR × Activity)
Actualoverhead
costsincurred
Adjusting of Overapplied & Underapplied OverheadAdjusting of Overapplied & Underapplied Overhead
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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Overhead is underapplied.
Overhead is underapplied.
Actualoverhead
costsincurred
Overheadapplied to
Work in Process
(POHR × Activity)
Adjusting of Overapplied & Underapplied OverheadAdjusting of Overapplied & Underapplied Overhead
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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Cost of Goods
Overhead is: Sold is: Adjustment will:
Actual overhead > applied overhead
Underapplied Too lowIncrease Cost of Goods Sold
Actual overhead < applied overhead
Overapplied Too highDecrease Cost of Goods Sold
Adjusting Cost of Goods Sold for underapplied or overapplied overhead
Adjusting of Overapplied and Underapplied OverheadAdjusting of Overapplied and Underapplied Overhead
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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FishCo had actual manufacturing overhead costs of $180,000. FishCo applied $192,000 of manufacturing overhead to jobs based on
a POHR of $8.00 per direct labor hour. FishCo’s manufacturing overhead is:
a. $12,000 overapplied.
b. $12,000 underapplied.
c. $96,000 overapplied.
d. $96,000 underapplied.
FishCo had actual manufacturing overhead costs of $180,000. FishCo applied $192,000 of manufacturing overhead to jobs based on
a POHR of $8.00 per direct labor hour. FishCo’s manufacturing overhead is:
a. $12,000 overapplied.
b. $12,000 underapplied.
c. $96,000 overapplied.
d. $96,000 underapplied.
QuestionQuestion
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FishCo had actual manufacturing overhead costs of $180,000. FishCo applied $192,000 of manufacturing overhead to jobs based on
a POHR of $8.00 per direct labor hour. FishCo’s manufacturing overhead is:
a. $12,000 overapplied.
b. $12,000 underapplied.
c. $96,000 overapplied.
d. $96,000 underapplied.
FishCo had actual manufacturing overhead costs of $180,000. FishCo applied $192,000 of manufacturing overhead to jobs based on
a POHR of $8.00 per direct labor hour. FishCo’s manufacturing overhead is:
a. $12,000 overapplied.
b. $12,000 underapplied.
c. $96,000 overapplied.
d. $96,000 underapplied.
Applied overhead 192,000$
Less actual overhead 180,000
Overapplied overhead 12,000$
QuestionQuestion
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The difference between FishCo's actual and applied overhead will result in
an adjustment that decreasescost of goods sold.
a. True
b. False
The difference between FishCo's actual and applied overhead will result in
an adjustment that decreasescost of goods sold.
a. True
b. False
QuestionQuestion
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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The difference between FishCo's actual and applied overhead will result in
an adjustment that decreasescost of goods sold.
a. True
b. False
The difference between FishCo's actual and applied overhead will result in
an adjustment that decreasescost of goods sold.
a. True
b. False
If overhead is overapplied, cost of goods sold is too high. The
adjustment will decrease cost of goods sold.
QuestionQuestion
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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Let’s look at the accounting journal entries for a job order cost system. We’ll omit the
numbers so that we can focus on accounts.
5. Job Order Costing - Typical Accounting Entries5. Job Order Costing - Typical Accounting Entries
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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GENERAL JOURNAL Page 21
Date DescriptionPost. Ref. Debit Credit
Raw Materials Inventory XXXXX
Accounts Payable XXXXX
Acquired materials on credit for
use in the factory.
Job Order CostingTypical Accounting Entries (Material Purchasing)Job Order CostingTypical Accounting Entries (Material Purchasing)
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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GENERAL JOURNAL Page 21
Date DescriptionPost. Ref. Debit Credit
Goods in Process Inventory XXXXX
Raw Materials Inventory XXXXX
To record use of direct material.
Factory Overhead
Raw Materials Inventory
To record use of indirect materials.
Job Order CostingTypical Accounting Entries (Direct Material & Indirect Material Requisition)
Job Order CostingTypical Accounting Entries (Direct Material & Indirect Material Requisition)
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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GENERAL JOURNAL Page 21
Date DescriptionPost. Ref. Debit Credit
Factory Payroll XXXXX
Cash XXXXX
To record factory salaries and wages.
Job Order CostingTypical Accounting Entries (Labor Cost)Job Order CostingTypical Accounting Entries (Labor Cost)
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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GENERAL JOURNAL Page 21
Date DescriptionPost. Ref. Debit Credit
Goods in Process XXXXX
Factory Payroll XXXXX
To record direct labor.
Factory Overhead
Factory Payroll
To record indirect labor.
Job Order CostingTypical Accounting Entries(Indirect & Direct Labor Cost)
Job Order CostingTypical Accounting Entries(Indirect & Direct Labor Cost)
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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GENERAL JOURNAL Page 21
Date DescriptionPost. Ref. Debit Credit
Factory Overhead XXXXX
Prepaid Insurance XXXXX
Accrued Utilities Payable XXXXX
Cash XXXXX
Accumulated Depreciation XXXXX
To record factory overhead items.
Job Order CostingTypical Accounting Entries (Actual Overhead Incurred)Job Order CostingTypical Accounting Entries (Actual Overhead Incurred)
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GENERAL JOURNAL Page 21
Date DescriptionPost. Ref. Debit Credit
Goods in Process XXXXX
Factory Overhead XXXXX
To apply overhead using a
predetermined overhead rate
Job Order CostingTypical Accounting Entries (Overhead Application)Job Order CostingTypical Accounting Entries (Overhead Application)
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GENERAL JOURNAL Page 21
Date DescriptionPost. Ref. Debit Credit
Finished Goods Inventory XXXXX
Goods in Process Inventory XXXXX
To record the transfer of completed
goods out of production.
Job Order CostingTypical Accounting Entries (Completed Goods transferred to Finished Goods Inventory)
Job Order CostingTypical Accounting Entries (Completed Goods transferred to Finished Goods Inventory)
McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2005
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GENERAL JOURNAL Page 21
Date DescriptionPost. Ref. Debit Credit
Cost of Goods Sold XXXXX
Finished Goods Inventory XXXXX
To record cost of goods sold.
Job Order CostingTypical Accounting Entries(Goods Sold and Transferred out of Finished Goods Inventory)
Job Order CostingTypical Accounting Entries(Goods Sold and Transferred out of Finished Goods Inventory)
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End of Chapter 19End of Chapter 19