27th Edition
WARREN + 5 others
ISBN: 9781337272094




27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Entries for costs in a job order cost system

Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March:

a. Materials purchased on account. $770,000

b. Materials requisitioned. $680,000, of which $75,800 was for general factory use

c. Factory labor used, $756,000, of which $182,000 was indirect

d. Other cost incurred on account for factory overhead. $245,000: selling expenses, $171,500; and administrative expenses, $110,600

e. Prepaid expenses expired for factory overhead. $24,500: for selling expenses, $28,420: and for administrative expenses, $16,660

f. Depreciation of factory equipment was $49,500; of office equipment, $61,800: and of office building, $14,900

g. Factory overhead costs applied to jobs, $568,500

h. Jobs completed, $1,500,000

i. Cost of goods sold, $1,375,000


Journalize the entries to record the summarized operations.

To determine

Job order costing

Job order cost system provides a separate record of each particular quantity of product that passes through the factory. Each quantity that is manufactured in the business is known as job. Job order costing is used when the products produced are significantly different from each other.

To record: the journal entry to record the summarized operations


The journal entries of operations of Company RT is as follows:

Date Account titles and Explanation Debit
a Materials 770,000  
      Accounts Payable   770,000
  (Record materials purchased)    
b Work in process 200,000  
  Factory overhead 75,800  
      Materials   680,000
  (Record material requisitioned to jobs)    
c Work in process 574,000  
  Factory overhead 182,000  
      Wages payable   756,000
  (Record factory labor used in production)    
d Factory overhead 245,000  
  Selling expenses 171,500  
  Administrative expenses 110,600  
      Accounts payable   527,100
  (Record other cost incurred in production)    
e Factory overhead 24,500  
  Selling expenses 28,420  
  Administrative expenses 16,660  
      Prepaid expenses   69,580
  (Record prepaid expenses expired for other cost)    
f Depreciation expense – Office building 49,500  
  Depreciation expense – Office Equipment 61,800  
  Factory overhead 14,900  
      Accumulated Depreciation expense –Building & Equipment  

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