Professional Documents
Culture Documents
SYSTEMS
(JOB ORDER COSTING AND PROCESS COSTING SYSTEM)
Examples are:
Carpentry works for furniture and fixtures, cabinets and the like
Buildings and houses
The job cost records also serve as the subsidiary ledger or documentation for the
cost of the work-in-process inventory, the finished goods inventory, and the
cost of goods sold.
Other
Documents
/evidences
Employee
Time
Ticket
Determine
Direct
Material
Needs
Determine
Direct
Labor
Cost
Determine
and
measure
Non-Mfg
Costs
Determine
and
Measure
Overhead
Costs
Predetermi
ned and
Applied
OH
xxxx
xxxx
#
When materials are issued
Work-in-Process
xxxx
Materials
xxxx
A separate time ticket is prepared by each worker for every working day.
Accounting department collects all time tickets at the end of the day.
These time tickets are used to record DLC on the Job Cost sheet of each
individual job order.
Work-in-Process
Cash or Wages Payable
#
xxxx
xxxx
Applied MOH = Predetermined OH Rate x Amt of the allocation based incurred by the job
= P8 x 27 DL hours
= P 216.00
Work-in-Process
Manufacturing Overhead
#
xxxx
xxxx
P 60,000
14,000
3. Advertising expenses
84,000
Salaries Expenses
60,000
Depreciation Expense
60,000
14,000
Accumulated Depreciation
3 & 4.
14,000
Advertising Expenses
84,000
16,000
100,000
Credit
Direct
Materials
Credit
Direct
Labor Cost
Credit
Manufact
uring
Overhead
WORK
IN
PROCESS
Work-In-Process
xxxx
Direct Materials
xxxx
Direct Labor
xxxx
MOH
xxxx
Credit
Work In
Process
Debit
Finished Goods
Journal Entry:
Finished Goods
Work-In-Process
#
xxxx
xxx
At the end of a period, the cost of incomplete jobs remain in the work-inprocess account and is shown as work-in-process inventory in assets
section of the balance sheet.
Next period these represents the opening balance of the work in process
account.
xxxx
Sales
xxxx
Cash Sales:
Cash
xxxx
Sales
xxxx
xxxx
xxxx
Actual
OH
Applied
OH
Incurred
Applied to
WIP
DEBITED
CREDITED
FG
CGS
WIP
OVER OR
UNDER
APPLIED MOH
xxxx
Work in Process
xxxx
Finished Goods
xxxx
Work-In Process
xxxx
xxxx
Finished Goods
xxxx
xxxx
MOH
xxxx
CGS
OVER OR
UNDER
APPLIED MOH
MOH
MOH
xxxx
xxxx
Cost of Goods Sold xxxx
THANK YOU.
During the year 2015, Bebe Company started two jobs Job A and Job B. Job A consisted
of 1,000 units and Job B consisted of 500 units. At the end of the year, Job A was completed
but Job B was in process. The information about manufacturing overhead cost applied to
Job A and B was as follows:
Job A: P 65,000; Job B:P 35,000. The actual OH cost by the company during 2015 was
P108,000. Out of 1,000 units in Job A, 750 units had been sold before the end of 2015.
Required: Calculate over or under applied MOH and make journal entries required to
dispose off over or under applied MOH assuming:
a.
It is disposed off by allocating between FG inventory and cost of goods sold account.
b.
It is disposed off by transferring the entire amount to cost of goods sold account.