Understand the flow of costs in a job-order costing system and prepare - 15582

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Understand the flow of costs in a job-order costing system and prepare appropriate journal entries to record costs.

Solution Description

 

In Job-order costing, the direct material, direct labor and manufacturing overhead costs are closed with work-in-process account. The cost of work-in-process is closed with finished goods and at the end finished goods account will close with cost of goods sold. The important entries frequently used in job-order costing are discussed below.

·         Purchase of raw material

 

Raw material Debit XXX

   Account payable Credit xxxx

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