Cost Bookkeeping

Question 1

Materials control account

Answer 1

Records all purchases of materials and issues to WIP

Question 2

Production overhead control account

Answer 2

Records the actual overhead incurred, the amount of overhead absorbed into WIP and any under- or over-absorption

Question 3

Wages control account

Answer 3

Records the total payroll costs and the transfers of direct labour to WIP and the indirect labour to overheads

Question 4

Work in progress control account

Answer 4

Records the total direct materials, direct labour and production overhead used in the production process in the period

Question 5

How are production costs recorded?

Answer 5

Dr materials. Cr cash/payables
Dr wages. Cr cash/HMRC
Dr production o/h. Cr cash/payables

Question 6

Direct costs issued to production - how are they recorded?

Answer 6

Dr WIP Cr materials

Dr WIP. Cr wages

Question 7

How to record indirect labour transferred to production overheads

Answer 7

Dr production o/h

Cr wages

Question 8

How to record production overheads absorbed into production

Answer 8

Dr WIP.

Cr production o/h

Question 9

How to record completed WIP transferred to finished goods

Answer 9

Dr finished goods. Cr WIP

Question 10

How to record finished goods are sold

Answer 10

Dr cos. Cr finished goods
Dr. Cash/receivables Cr sales
Dr sales. Cr spl

Question 11

How to record non-production overheads charged to spl

Answer 11

Dr non-production overheads
Cr payables/cash

Dr spl
Cr non-production overheads