Illustrative Entries
Job Costing
To Record Direct Materials, Direct Labor, and Apply Factory Overhead
| 6-15-X3 |
Raw Materials Inventory |
10,000 |
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|
Accounts Payable |
10,000 |
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To
record purchase of raw materials |
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| 6-20-X3 |
Work in Process Inventory |
18,000 |
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| Raw Materials Inventory |
10,000 |
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| Salaries Payable |
3,000 |
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| Factory Overhead |
5,000 |
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|
To
transfer raw materials to production, record direct labor costs on job,
and apply overhead at the predetermined rate |
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| 6-21-X3 |
Finished Goods Inventory |
18,000 |
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| Work in Process Inventory | 18000 | |||
|
To
transfer completed units to finished goods inventory |
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| 6-25-X3 |
Accounts Receivable |
25,000 |
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| Sales |
25,000 |
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|
To
record sale of finished pipe for $25,000 |
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|
Cost of goods sold |
18,000 |
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| Finished Goods Inventory |
18,000 |
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| To transfer of finished goods to cost of goods sold |
To Record Actual Overhead
| 6-30-X3 |
Factory Overhead |
100,000 |
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| Salaries Payable |
50,000 |
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| Supplies |
15,000 |
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| Prepaid Insurance |
5,000 |
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| Accumulated Depreciation |
11,000 |
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| Taxes Payable |
9,000 |
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| Utilities Payable |
10,000 |
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| To record various factory overhead costs |
To Record Overapplied Overhead
| 6-30-X3 |
Factory Overhead |
10,000 |
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| Cost of Goods Sold |
10,000 |
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| To reduce cost of goods sold for the overapplied overhead |
To Record Underapplied Overhead
| 6-30-X3 |
Cost of Goods Sold |
10,000 |
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| Factory Overhead |
10,000 |
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| To transfer underapplied overhead to cost of goods sold |