Unit 1 Chapter 4 Flashcards
Job-order costing system
A system used in situations where many different products, jobs or services are produced each period
Sequence of events in a Job-order system
Receive orders from customers
Schedule jobs
Order materials
Begin production
Documents used in job-order costing system
Job cost sheet
Material requisition form
Employee time ticket
A bill of materials
Job cost sheet
A form prepared for each job that records the materials, labour and overhead costs charged to the job
Material requisition form
A detailed source document that specifies the type and quantity of materials that are to be drawn from the storeroom.
It identifies the job which the costs of materials are to be charged
Employee time ticket
A detailed source document that is used to record an employee’s hour-by-hour activities during the day.
A bill of materials
is a document that lists the type and quantity of each item of materials needed to complete a unit of product
APPLICATION OF MANUFACTURING OVERHEAD
Predetermined overhead rate = Estimated total manufacturing overhead cost/Estimated total units in the allocation base
Overhead applied to a job = Predetermined overhead rate x Amount of allocation base incurred by job
purchase and issue of materials
DR Raw materials
CR Accounts payable
Issue of direct and indirect materials
DR Work in progress
DR Manufacturing overhead
CR Raw materials
Issue of direct materials only
DR Work in progress
CR Raw materials
Labour cost
DR Work in progress
DR Manufacturing overhead
CR Salaries and wages payable
Application of manufacturing overhead to work in progress
DR Work in progress
CR Manufacturing overhead
Cost of goods manufactured
DR Finished goods
CR Work in progress
Cost of goods sold
DR Cost of goods sold
CR Finished goods
