Purchased at this point the cost of materials is not

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purchased ± At this point, the cost of materials is not assigned to specific jobs or orders Example ° On January 4, Wallace Manufacturing purchases 2,000 handles at $5 per unit ($10,000) and 800 modules at $40 per unit ($32,000) for a total cost of $42,000
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DeGrooteSchool.ca Accumulating Manufacturing Costs – Labour ± Consists of: ² gross earnings of factory workers ² employer payroll taxes on such earnings ² fringe benefits incurred by the employer ± Debited to Factory Labour when incurred. Example Wallace Manufacturing incurs $32,000 of factory labour costs, of which $27,000 relates to wages payable and $5,000 relates to payroll taxes payable in January
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DeGrooteSchool.ca Accumulating Manufacturing Costs - Overhead ± May be recognized daily For example, machinery repairs , indirect materials, and indirect labour. ± May also be recorded periodically through adjusting entries For example, property taxes, amortization, and insurance. The summary entry for Wallace Manufacturing Company is: Manufacturing overhead is a Control Account
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DeGrooteSchool.ca Assigning Manufacturing Costs ± Manufacturing costs are assigned to work in process with Debits to Work in Process Inventory Credits to : Raw Materials Inventory Factory Labour Manufacturing Overhead ± Entries assigning costs to work in process are usually made monthly ± Job cost sheet ² Used to record the costs of a specific job ² Used to determine the total and unit costs of a completed job ² Postings to job cost sheets are made daily
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DeGrooteSchool.ca Job Cost Sheet
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DeGrooteSchool.ca Next Class - Assigning Manufacturing Costs (WIP) - Populating Job Cost Sheet - Predetermined Overhead Rate - Assigning Cost to Finished Goods (FG)
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