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Thejournalentrytorecordfactorylaborcosts chapter 21

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Unformatted text preview: ires fewer material requisition slips than a job order cost system Materials are used for processes and not specific jobs Requisitions are for larger quantities of materials The journal entry to record materials used: Chapter 21-18 Assignment of Manufacturing Costs Assignment of Manufacturing Costs Factory Labor Costs Time tickets may be used in both systems All labor costs incurred within a production department are a cost of processing. The journal entry to record factory labor costs: Chapter 21-19 Assignment of Manufacturing Costs Assignment of Manufacturing Costs Manufacturing Overhead Costs Objective of assigning overhead – allocate overhead to departments on an objective and equitable basis Use the activity that “drives” or causes the costs Machine time used ­ primary driver in continuous manufacturing operations Chapter 21-20 Assignment of Manufacturing Costs Assignment of Manufacturing Costs Manufacturing Overhead Costs The entry to allocate overhead to the two Chapter 21-21 processes is: Assignment of Manufacturing Costs Assignment of Manufacturing Costs Entries to Transfer Costs Through System Monthly Entry to transfer goods to next department: Entry to transfer completed goods to Finished Goods: Entry to record Cost of Goods sold at the time of sale: Chapter 21-22 Assignment of Manufacturing Costs Assignment of Manufacturing Costs Review Question In making the journal entry to assign raw materials costs: a. The debit is to Finished goods Inventory. b. The debit is often to two or more work in process accounts. c. The credit is generally to two or more work in process accounts. d. The credit is to Finished Goods Inventory. Chapter 21-23 Equivalent Units Equivalent Units Example – XYZ College Compute the cost of instruction at XYZ College per full­time equivalent student based on the following information: Total cost of instruction is $9,000,000. There are 900 full­time students and 1,000 part­time students. Part­time students take 60% of the classes of a regular student. Illustration 21-7 Chapter 21-24 Equivalent Units Example Continued Equivalent Units Example Continued Cost of instruction per full-time equivalent student equals Total cost of i...
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