Professional Documents
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Ch.4 Job Costing
Ch.4 Job Costing
Similarities Differences
1. The manufacturing 1. The number of work in
cost elements. process accounts used.
Example:
Assume that $24,000 of direct materials and $6,000 of indirect materials are used by
Wallace Manufacturing in January.
Assigning
Raw Materials Cost
The sum of the direct materials columns of
the job cost sheets should equal the direct
materials debited to Work in Process
Inventory.
Example:
Assume that total factory labor cost is $32,000 of total factory labor cost which
consists of $28,000 of direct labor cost and $4,000 of indirect labor cost.
Job Cost Sheets
After Posting
The sum of the direct labor columns of the job
cost sheets should equal the direct labor
debited to Work in Process Inventory.
Illustration 2-10
Current trend is to use machine hours as the activity base due to
increased automation in manufacturing operations.
Assigning Manufacturing Costs to Work In Process
Example:
Wallace Manufacturing uses direct labor cost as the activity base.
The entry for Wallace Company to transfer its total cost to Finished
Goods Inventory is:
Example:
On January 31 Wallace Company sells Job No. 101, costing
$39,000, for $50,000.
Assigning Costs to Finished Goods
When a job
is completed,
the costs
are
summarized
and the job
cost sheet is
completed.
Summary of Job Order Cost Flows
Summary of Document Flows in
a Job Order Cost System
Advantages of Job Order Costing
Example:
Wallace Company has a $2,500 credit balance in Manufacturing Overhead at
December 31. The adjusting entry for the overapplied overhead is:
Under- or Overapplied Manufacturing Overhead
Review Question
Manufacturing overhead is underapplied if:
Base Calculation