Chapter 3 Cost accounting Flashcards
Cost accounting
2 cost accounting systems and major differences between them
4 steps in cost flow for job order cost system
1 step in cost flow journal entries
(raw materials, factory labour and manufacturing overhead)
1) DR Raw Material Inventory
CR Accounts Payable
(to record the purchase of raw materials on account)
2) DR Factory Labour
CR Payroll Liabilities
(To record factory labour costs)
these are recorded as they are incurred
3) DR Manufacturing Overhead
CR Utilities Payable
CR Prepaid Insurance
CR Accounts Payable (for repairs)
CR Acc. Depreciation
CR Property Taxes Payable
(To record overhead costs)
are labour costs of employees not included in the manufacturing process included in factory Labour?
No, their wages will be a part of Salaries and Wages Expense Account
factory labour consists of which 3 costs
1) Gross earnings of factory workers.
2) Employer payroll taxes on these earnings.
3) Fringe benefits incurred by the employer (such as sick pay, group insurance, and vacation pay).
When are MOs recognized?
They can be recognized as often as daily (like for repairs) or periodically as adjusting entries. Entries for MOs are summary entries (A journal entry that summarizes the totals from multiple transactions).
The Work In Process is referred to ________ account because ___________
1) control
2) it summarizes the detailed data regarding specific jobs contained in the job cost sheets
