The transactions listed below occurred during the current mo

The transactions listed below occurred during the current month. Prepare the journal entries for each transaction and match the correct amount, account, debit or credit that follows.

Total materials issued to production, $145,000 of which $115,000 was traceable to specific jobs.

Labor costs incurred during the period totaled $280,000, of which $80,000 related to factory supervisors and factory custodians.

Depreciation recorded on equipment was $52,000.   $45,000 of this amount was on equipment used in factory operations, and the remaining $7,000 was for equipment used in the corporate office.

Manufacturing overhead is applied to production at the rate of $6.00 per machine hour. Planned machine hours were 70,000 but due to greater demand, the company worked 80,000 machine hours during the year.

Goods costing $900,000 were completed during the year.

Transaction A: Which account(s) credited?

Transaction B: Which account(s) debited?

Transaction C: Which account(s) credited?

Transaction D: Which account(s) debited?

Transaction E: Which account(s) credited?

Work in Process and Manufacturing Overhead

Work in Process

Work in Process

Materials Inventory

Accumulated Depreciation

Solution

Job cost system (job costing) accumulates expenses incurred in line with the person jobs. Businesses as a rule use job fee methods when they are able to identify separate merchandise or once they produce goods to meet a patrons specific desires.
Who makes use of job costing? Examples incorporate dwelling builders who design targeted houses for every client and accumulate the costs separately for each and every job, and caterers who accumulate the expenditures of each ceremonial dinner separately. Consulting, legislation, and public accounting companies use job costing to measure the bills of serving each and every purchaser. Motion pix, printing, and different industries where distinctive jobs are produced use job costing. Hospitals also use job costing to investigate the cost of each sufferers care.
Instance
anticipate ingenious Printers is a corporation run via a gaggle of scholars who use computing device publishing to provide specialty books and instruction manuals. Ingenious Printers uses job costing. Ingenious Printers continues track of the time and substances (generally paper) used on each job.
The manufacturer compares the fee of every job with the sales obtained to be sure the roles are beneficial. Repeatedly the manufacturer learns that unique jobs are too luxurious due to the fact that the costs they can cost. For illustration, inventive Printers just lately realized that cookbooks weren\'t beneficial. On the other hand, printing guideline manuals used to be relatively moneymaking, so the organization has centered extra on the instruction guide market. To illustrate a job costing system, this section describes the transactions for the month of July for ingenious Printers.
On July 1, creative Printers had these establishing inventories:
substances stock (or uncooked substances inventory) $20,000
Work in procedure stock
(Job No. 106: direct substances, $four,200;direct labor, $5,000; and overhead, $4,000)

thirteen,200
completed goods stock (Job No. A hundred and five) 5,500
creative Printing had completed Job No. A hundred and five, a set of gardening books, but had no longer shipped them to the client as of June 30. Extra know-how involving July transactions follows:
a. Throughout July, ingenious Printers bought $ 25,000 of substances on account. This buy included each direct materials, similar to paper, and indirect materials, corresponding to printing provides and computer provides. The journal entry required can be:
Debit credit
a. Uncooked substances stock $ 25,000
accounts Payable 25,000
purchased materials on account  
b. Throughout July, ingenious Printers sent direct materials from the materials storeroom to jobs as follows: $ 9,000 to Job No. 106, and $ 14,000 to Job No. 107. The organization additionally despatched oblique substances of $ 1,000 to jobs. We wish to transfer the cost of the direct substances FROM raw materials stock TO work in system stock. It charged indirect substances to overhead, not to each job, since the company does not preserve monitor of how so much indirect materials it makes use of on each and every job. (Manufacturing organizations most commonly use Manufacturing (or manufacturing unit) Overhead for the Overhead account. We most of the time use the Overhead account for each manufacturing and non-manufacturing firms on this chapter.) The entries can be:
Debit credit
b. Work In procedure stock 23,000
uncooked materials inventory 23,000
file direct substances used ($9,000+ 14,000)  
Overhead 1,000
raw materials inventory 1,000
document oblique materials used  
c. Creation workers keep track of the time spent on each job at creative Printers. Situated on that knowledge, the enterprise assigned creation-associated labor bills to jobs (direct labor) and to Overhead as follows: $4,000 to Job No. 106, $ sixteen,000 to Job No. 107, and oblique labor of $ 2,000 to Overhead. The entry to file payroll incurred during the accounting interval (no longer proven) entails a debit to Payroll summary (or manufacturing unit Payroll) and a credit score to money or a legal responsibility money owed relying if it has been paid. In these entries, we can distribute the payroll abstract (factory Payroll) to the jobs and overhead. For direct labor, we wish to take the cost of labor FROM the payroll abstract account TO work in process stock. For oblique labor, we will be able to cost this to overhead alternatively of to a certain job in work in approach inventory.
Debit credit score
c. Work In system inventory 20,000
manufacturing facility Payroll 20,000
document direct labor used ($4,000+ sixteen,000)  
Overhead 2,000
factory Payroll 2,000
record indirect labor used  
d. The company assigns overhead to every job on the foundation of the computing device-hours every job makes use of. Overhead is assigned to a job on the fee of $ 2 per computing device-hour used on the job. Job 16 had 875 laptop-hours so we\'d cost overhead of $1,750 (850 laptop-hours x $2 per laptop-hour). Job 17 had 4,050 computing device-hours so overhead would be $8,a hundred (four,050 computing device-hours x $2). The journal entry to apply or assign overhead to the roles can be to maneuver the fee FROM overhead TO work in process inventory.
Debit credit score
d. Work In process inventory 9,850
Overhead 9,850
report overhead utilized ($1,750+ 8,one hundred)  
The complete job fee sheets for Jobs 106 and 107 would appear as below:
Job: 106 107
starting Work in system $13,200 zero
added this period:
Direct substances 9,000 14,000
Direct Labor four,000 sixteen,000
Overhead utilized 1,750 eight,100
whole Job fees $ 27,950 $ 38,000ne-hours x $2). The journal entry to apply or assign overhead to the jobs would be to move the cost FROM overhead TO work in process inventory.
Debit Credit
d. Work In Process Inventory 9,850
Overhead 9,850
Record overhead applied ($1,750+ 8,100)  
The complete job cost sheets for Jobs 106 and 107 would appear as below:
Job: 106 107
Beginning Work in Process $13,200 0
Added this period:
Direct Materials 9,000 14,000
Direct Labor 4,000 16,000
Overhead applied 1,750 8,100
Total Job Costs $ 27,950 $ 38,100