Old School Publishing Inc. began printing operations on January 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $7,500 of indirect materials and $11,800 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form: Job 301 Job 302 Direct materials $10,500 Direct materials $21,600 Direct labor 7,200 Direct labor 15,600 Factory overhead 4,752 Factory overhead 10,296 Total $22,452 Total $47,496 Job 303 Job 304 Direct materials $23,800 Direct materials $15,900 Direct labor 19,100 Direct labor 14,000 Factory overhead — Factory overhead — Required: Journalize the Jan. 31 summary entries to record each of the following operations for January (one entry for each operation). Refer to the Chart of Accounts for exact wording of account titles. Direct and indirect materials used. Direct and indirect labor used. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost). Completion of Jobs 301 and 302.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Job 301 Job 302
Direct materials $10,500 Direct materials $21,600
Direct labor 7,200 Direct labor 15,600
Factory overhead 4,752 Factory overhead 10,296
Total $22,452 Total $47,496
Job 303 Job 304
Direct materials $23,800 Direct materials $15,900
Direct labor 19,100 Direct labor 14,000
Factory overhead — Factory overhead —
Required:
Journalize the Jan. 31 summary entries to record each of the following operations for January (one entry for each operation). Refer to the Chart of Accounts for exact wording of account titles.
- Direct and indirect materials used.
- Direct and indirect labor used.
- Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost).
- Completion of Jobs 301 and 302.
CHART OF ACCOUNTS
Old School Publishing Inc.
General Ledger
ASSETS
110 Cash
121
125 Notes Receivable
126 Interest Receivable
131 Materials
132 Work in Process
133 Factory Overhead
134 Finished Goods
141 Supplies
142 Prepaid Insurance
143 Prepaid Expenses
181 Land
191 Factory
192 Accumulated
LIABILITIES
210 Accounts Payable
221 Utilities Payable
231 Notes Payable
236 Interest Payable
241 Lease Payable
251 Wages Payable
252 Consultant Fees Payable
EQUITY
311 Common Stock
340
351 Dividends
390 Income Summary
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Goods Sold
520 Wages Expense
531 Selling Expenses
532 Insurance Expense
533 Utilities Expense
534 Office Supplies Expense
540 Administrative Expenses
560 Depreciation Expense-Factory
590 Miscellaneous Expense
710 Interest Expense
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