ACC 312 Study Guide - Midterm Guide: Subledger

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greenwalrus59

13 Nov 2017

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Job order costing: job-order costing the flow of costs. Learning objective 4: prepare journal entries to record costs in a job-order costing system. Manufacturing overhead: the credit side of the entry is the various liability accounts (e. g. , accounts payable and property taxes. Accumulated depreciation): in journal entry form, debit manufacturing overhead and credit various accounts as shown. Learning objective 5: apply overhead cost to work in process using a predetermined overhead rate: applying manufacturing overhead costs to work in process, in t-account form, work in process is debited and manufacturing. The actual amount of overhead incurred during the period on the debit side of the account will almost certainly not equal the amount applied to work in process as shown on the credit side of the account. This requires a year-end adjusting entry that will be discussed shortly: in journal entry form, debit work in process and credit manufacturing. Helpful hint: students sometimes have difficulty understanding the use of.

Related Questions

Identify each statement as true or false. If false, indicate howto correct the statement.

1. Process cost systems are used to apply costs to similarproducts that are mass-produced in a continuous fashion.
2. A process cost system is used when each finished unit isindistinguishable from another.
3. Companies that produce soft drinks, motion pictures, andcomputers chips would all use process cost accounting.
4. In a process cost system, costs are tracked by individualjobs.
5. Job order costing and process costing track differentmanufacturing costs elements.
6. Both job order costing and process costing account for directmaterials, direct labor, and manufacturing overhead.
7. Costs flow through the accounts in the same basic way for bothjob order costing and process costing.
8. In a process cost system, only one work in process account isused.
9. In a process cost system, costs are summarized in a job costsheet.
10. In a process cost system, the unit cost is total manufacturingcosts for the period divided by the units produced during theperiod.

byzantiumpanda529

The Polaris Company uses a job-order costing system. The following transactions occurred in October:

a. Raw materials purchased on account, $210,000.

b. Raw materials used in production, $188,000 ($150,400 direct materials and $37,600 indirect materials).

c. Accrued direct labor cost of $48,000 and indirect labor cost of $20,000.

d. Depreciation recorded on factory equipment, $104,000.

e. Other manufacturing overhead costs accrued during October, $129,000

f. The company applies a manufacturing overhead cost to production using a predetermined rate of $7 per machine-hour. A total of 76,100 machine-hours were used in October.

g. Jobs costing $513,000 according to their job cost sheets were completed during October and transferred to Finished Goods.

h. Jobs that had cost $449,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 24% above cost.

Required:

1. Prepare journal entries to record the transactions above.

2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account record the transactions given above. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $37,000

erincrab353

EXERCISE 3-9 Journal Entries and T-accounts [LO3-2, L03-4, LO3-5] The Polaris Company uses a job-order costing system. The following data relate to October, the first month of the company's fiscal year. a. Raw materials purchased on account, $210,000. b. Raw materials issued to production, $190,000 ($178,000 direct materials and $12,000 indirect materials). c. Direct labor cost incurred, $90,000; indirect labor cost incurred, $110,000. d. Depreciation recorded on factory equipment, $40,000. e. Other manufacturing overhead costs incurred during October, $70,000 (credit Accounts Payable). f. The company applies manufacturing overhead cost to production on the basis of $8 per machine-hour. A total of 30,000 machine-hours were recorded for October. g. Production orders costing $520,000 according to their job cost sheets were completed during October and transferred to Finished Goods. h. Production orders that had cost $480,000 to complete according to their job cost sheets were shipped to customers during the month. These goods were sold on account at 25% above cost. Required: 1. Prepare journal entries to record the information given above. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant infor- mation above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $42,000.

ACC 312 Study Guide - Midterm Guide: Subledger

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