WRD_ch19

Accounting

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Unformatted text preview: 11-119-1Job Order Costing1911-219-2Learning Objective 13-1Describe the nature of the adjusting process.Learning Objective 13-1Describe the nature of the adjusting process.Insert Chapter ObjectivesJob Order Costing1Describe cost accounting systems used by manufacturing businesses.2Describe and illustrate a job order accounting system.After studying this chapter, you should be able to:19-23Describe the use of job order cost information for decision making.4Describe the flow of costs for a service business that uses a job order cost accounting system.11-319-319-31Describe cost accounting systems used by manufacturing businesses.11-419-4Cost Accounting System OverviewA job order cost systemprovides product costs for each quantity of product that is manufactured. Each quantity of product that is manufactured is termed a job. Manufacturers that use a job order cost system are sometimes called job shops.111-519-5Summary of Legend Guitars Manufacturing Operations(continued)1Exhibit 111-619-61Summary of Legend Guitars Manufacturing Operations(continued)Exhibit 111-719-7A process cost systemprovides product costs for each manufacturing department or process. Process cost systems are often used by companies that manufacture units of a product that are indistinguishable from each other and are manufactured using a continuous production process.1Cost Accounting System Overview11-819-819-82Describe and illustrate a job order cost accounting system.11-919-9Flow of Manufacturing Costs2Exhibit 211-1019-10In a job order cost accounting system, perpetual inventory controlling accounts and subsidiary ledgers are maintained for materials, work in process, and finished goods inventories as shown below:211-1119-11The receiving report and the invoice are used to record the receipt of the merchandise and to control the payment for purchased items.InvoiceReceiving Report No. 1962Materials11-1219-12Materials Information and Cost FlowsTo Materials Requisitionsa.2Exhibit 311-1319-13From Materials Ledger AccountJob Cost SheetsMaterials Requisitionsb.b.b.b.2Materials Information and Cost Flows(continued)Exhibit 311-1419-14The journal entry to record the suppliers invoice related to Receiving Report 196 is as follows:InvoiceReceiving Report No. 196750 units of No. 8 Maple Wood211-1519-15The storeroom releases materials for use in manufacturing when a materials requisition is received. Job cost sheetsmake up the work in process subsidiary ledger.211-1619-16A summary of the materials requisitions is used as a basis for the journal entry recording the materials used for the month. For the requisition of direct materials, the following entry is made:211-1719-17Example Exercise 19-1Issuance of Materials219-17On March 5, Hatch Company purchased 400 units of raw materials at $14 per unit. On March 10, raw materials were requisitioned for production as follows: 200 units for Job 101 at $12 per unit, and 300 units for Job 102 at $14 per unit. Journalize the entry on March 5 to record the purchase and on March 10 to record the requisition from the materials storeroom.11-18...
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WRD_ch19 - 11-119-1Job Order Costing1911-219-2Learning...

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