19-1
Chapter
19
McGraw-Hill/Irwin
Job Order
Cost Accounting
© The McGraw-Hill Companies, Inc., 2005
19-2
Learning objectives
1. Job Order Costing Accounting System
2. Job Order Cost Flows and Reports
3. Overhead and Overhead Application
4. Adjust Overapplied and Underapplied Overhead
5. Job Order Accounting Typical Journal Entries
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-3
1. Job Order Costing Accounting System
- Job Order Manufacturing
Process
Costing
Job
Costing
Chapter 20

Used for production of large, unique,
high-cost items.

Built to order rather than mass produced.

Many costs can be directly traced to each job.
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-4
Job Order Manufacturing
Process
Costing
Job
Costing
Chapter 20
Typical job order cost applications:
 Special-order printing
 Building construction
Also used in service industry
 Hospitals
 Law firms
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-5
1. Job Order Costing Accounting System
- Events in Job Order Costing
Receive
orders from
customers.
Begin
production
with material
& Labor.
Predict Cost.
Schedule
Negotiate Price
jobs.
McGraw-Hill/Irwin
Schedule Job.
Order
raw materials.
© The McGraw-Hill Companies, Inc., 2005
19-6
Events in Job Order Costing
Indirect
Materials
Direct
Indirect
Factory Allocate
Overhead
Labor
McGraw-Hill/Irwin
Goods in
Process
Job B15
Job B16
Job B17
Job B18
Job B19
Finished
Goods
Job B15
Job B16
Job B17
Cost of
Goods
Sold
Job B15
Job B16
Direct
© The McGraw-Hill Companies, Inc., 2005
19-7
2. Job Order Cost Flows and Reports
- Job Order Cost Documents
The primary document
for tracking the costs
associated with a
given job is the job
cost sheet.
Let’s investigate
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-8
Job Cost Sheet
Exh.
19-2
Road Warriors Job Cost Sheet
Customer
Carroll Connor
Job No.
B15
Address 1442 High Point Dr. Portland, Oregon
Job Description Level I Alarm System on Ford Expedition
Date promised 3/15/05 Dated started 3/3/05
Date completed
Direct Materials
Date
Req.
Cost
Total
Total
Remarks
McGraw-Hill/Irwin
Direct Labor
Date
Ticket
Cost
Factory Overhead
Date
Rate
Cost
Total
Cost Summary
Direct Materials
Direct Labor
Factory Overhead
Total Cost
© The McGraw-Hill Companies, Inc., 2005
19-9
2. Job Order Cost Flows and Reports
- Job Cost Sheet (Direct Material)
Exh.
19-2
Road Warriors Job Cost Sheet
Customer
Carroll Connor
Job No.
B15
Address 1442 High Point Dr. Portland, Oregon
Job Description Level I Alarm System on Ford Expedition
Date promised 3/15/05 Dated started 3/3/05
Date completed
Direct Materials
Date
Req.
Cost
Total
A materials requisition
Direct
Labor to authorize
Factory Overhead
is used
the
Date
Ticket
Cost
Date
Rate
Cost
use of materials on a
job.
Total
Remarks
Total
Cost Summary
Let’s see one
Direct Materials
Direct Labor
Factory Overhead
Total Cost
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-10
Materials Requisition
Exh.
19-5
Road Warriors Materials Requisition No. R-4705
Job No. B15
Material Stock No.
Date
3-7-05
M-347
Material Description
Alarm system wiring
Quantity Requested
1
Quantity Provided
Filled By
1
M. Batemen
Requested By
C. Luther
Date Provided
3-7-05
Received By
C. Luther
Remarks
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-11
Exh.
20-5
Materials Requisition
Road Warriors Materials Requisition No. R-4705
Job No. B15
Material Stock No.
Date
Proper
authorization
3-7-05
M-347
Material Description
Alarm system wiring
Quantity Requested
1
Cost of material
Quantity Provided
1
is charged
to
Filled By M. Batemen
Job B15.
Requested By
C. Luther
Date Provided
3-7-05
Received By
C. Luther
Remarks
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-12
Exh.
20-5
Materials Requisition
Road Warriors Materials Requisition No. R-4705
Job No. B15
Material Stock No.
Date
3-7-05
M-347
Material Description
Alarm system wiring
Quantity Requested
1
Requested By
Pre-printed,
sequentially
numbered
C. Luther form.
Quantity Provided
Filled By
Remarks
McGraw-Hill/Irwin
1
Date Provided 3-7-05
Type
and quantity
of
Received By
M. Batemen
material charged
to C. Luther
Job B15.
© The McGraw-Hill Companies, Inc., 2005
19-13
Exh.
20-5
Materials Requisition
Road Warriors Materials Requisition No. R-4705
Job No. B15
Material Stock No.
Date
3-7-05
M-347
Material Description
Alarm system wiring
Quantity Requested
1
Requested By
C. Luther
The materials1 requisition
form also serves as
Date Provided 3-7-05
the source document for
recording
Filled By M. Batemen
Received By
C.material
Luther
usage in the accounting records.
Quantity Provided
Remarks
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-14
Materials Ledger Card
Exh.
19-4
Road Warriors Materials Ledger Card
Item
Alarm sys. wiring
Maximum Qty.
5 units
Stock No.
M-347
Minimum Qty. 1 unit
Location
Bin137
Reorder Qty. 2 units
Received
Issued
Balance
Rec.
Unit Total Req.
Unit Total
Unit Total
Date Rep. Units Cost Cost No. Units Cost Cost Units Cost Cost
1
$225 $225
3/4/05 C7117 2
$225 $450
3
$225 $675
3/7/05
R4705 1 $225 $225
2
$225 $450
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-15
Job Cost Sheet (Direct Material)
Exh.
19-2
Road Warriors Job Cost Sheet
Customer
Carroll Connor
Job No.
B15
Address 1442 High Point Dr. Portland, Oregon
Job Description Level I Alarm System on Ford Expedition
Date promised 3/15/05 Dated started 3/3/05
Date completed
Direct Materials
Date
Req.
Cost
3/7/05 R4705
$225
Total
$225
Remarks
McGraw-Hill/Irwin
Direct Labor
Date
Ticket
Cost
Total
Factory Overhead
Date
Rate
Cost
Total
Cost Summary
Direct Materials
Direct Labor
Factory Overhead
Total Cost
$225
© The McGraw-Hill Companies, Inc., 2005
19-16
Job Order Costing
Typical Accounting Entries (Direct & Indirect Material)
GENERAL JOURNAL
Date
Description
Mar 7 Goods in Process Inventory - Job B15
Page 21
Post.
Ref.
Debit
Credit
225
Raw Materials Inventory - M - 347
225
To record require & use of direct material alarm system wiring.
Factory Overhead
Raw Material Inventory
50
50
To record require & use of indirect material.
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-17
2. Job Order Cost Flows and Reports
- Job Cost Sheet (Direct Labor)
Exh.
19-2
Road Warriors Job Cost Sheet
Customer
Carroll Connor
Job No.
B15
Accumulate
Address 1442 High Point Dr. Portland, Oregon
Job Description Level I Alarm System on Ford Expedition direct labor
Date promised 3/15/05 Dated started 3/3/05
Date completed
Direct Materials
Date
Req.
Cost
3/7/05 R4705
$225
Total
$225
Remarks
costs by
Direct Labor
Factory Overhead
means of a
Date
Ticket
Cost
Date
Rate
Cost
work record,
such as a time
ticket, for each
Total
Total
employee.
Cost Summary
Direct Materials
Direct Labor
Factory Overhead
Total Cost
McGraw-Hill/Irwin
$225
Let’s see one
© The McGraw-Hill Companies, Inc., 2005
19-18
Labor Time Ticket
Exh.
19-7
Road Warriors Time Ticket No. L-3479
Job No.
Date
B15
Employee Name T. Zeller
3/8/05
Employee Number
3969
TIME AND RATE INFORMATION:
Start Time
Elapsed Time
Approved By
9:00
3.0
Finish Time
12:00
Hourly Rate
$20.00
Total Cost
$60.00
C. Luther
Remarks
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-19
Job Cost Sheet (Direct Labor)
Exh.
19-2
Road Warriors Job Cost Sheet
Customer
Carroll Connor
Job No.
B15
Address 1442 High Point Dr. Portland, Oregon
Job Description Level I Alarm System on Ford Expedition
Date promised 3/15/05 Dated started 3/3/05
Date completed
Direct Materials
Date
Req.
Cost
3/7/05 R4705
$225
Total
$225
Remarks
McGraw-Hill/Irwin
Direct Labor
Date
Ticket
Cost
3/8/05 L3479
$60
Total
$60
Factory Overhead
Date
Rate
Cost
Total
Cost Summary
Direct Materials
Direct Labor
Factory Overhead
Total Cost
$225
60
© The McGraw-Hill Companies, Inc., 2005
19-20
Job Order Costing
Typical Accounting Entries
GENERAL JOURNAL
Date
Description
Page 21
Post.
Ref.
Debit
Mar 8 Goods in Process - Job B15
Credit
60
Factory Payroll
60
To record direct labor of 3 hours ($20 hour rate) used for Job B15.
Factory Overhead
100
Factory Payroll
100
To record indirect labor of 5 hours ($20 hour rate).
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-21
2. Job Order Cost Flows and Reports
- Job Cost Sheet (Factory Overhead)
Exh.
19-2
Road Warriors Job Cost Sheet
Customer
Carroll Connor
Job No.
B15
Address 1442 High Point Dr. Portland, Oregon
Job Description Level I Alarm System on Ford Expedition
Date promised 3/15/05 Dated started 3/3/05
Date completed
Direct Materials
Date
Req.
Cost
3/7/05 R4705
$225
Total
$225
Direct Labor
Date
Ticket
Cost
3/8/05 L3479
$60
Total
Factory Overhead
Date
Rate
Cost
Total
AssignRemarks
manufacturing overhead
toSummary
jobs using a
Cost
Direct Materials
predetermined overhead
rate based on direct $225
Direct Labor
60
labor
cost.
Factory Overhead
Let’s do it
Total Cost
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-22
Job Cost Sheet (Factory Overhead)
Exh.
19-2
Road Warriors Job Cost Sheet
Customer
Carroll Connor
Job No.
B15
Address 1442 High Point Dr. Portland, Oregon
Job Description Level I Alarm System on Ford Expedition
Date promised 3/15/05 Dated started 3/3/05
Date completed 3/11/05
Direct Materials
Date
Req.
Cost
3/7/05 R4705
$225
Total
$225
Remarks
McGraw-Hill/Irwin
Direct Labor
Date
Ticket
Cost
3/8/05 L3479
$60
Total
$60
Factory Overhead
Date
Rate
Cost
3/8/05
160% $96
Total
Cost Summary
Direct Materials
Direct Labor
Factory Overhead
Total Cost
$96
$225
60
96
$381
© The McGraw-Hill Companies, Inc., 2005
19-23
Predetermined Overhead
Allocation Rate Formula
Road Warriors uses a predetermined
overhead rate (POHR) based on direct
labor cost to apply overhead to jobs.
POHR =
POHR =
McGraw-Hill/Irwin
Estimated total manufacturing
overhead cost for the coming period
Estimated total direct labor costs
for the coming period
$200,000
$125,000
= 160% of direct labor $
© The McGraw-Hill Companies, Inc., 2005
19-24
Job Order Costing
Typical Accounting Entries
GENERAL JOURNAL
Date
Description
Mar 8 Goods in Process - Job B15
Factory Overhead
Page 21
Post.
Ref.
Debit
Credit
96
96
To apply overhead to Job B15 using a
predetermined overhead rate
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-25
Costing
2.Job
JobCost
Order
Cost Flows and Reports
Document
Flowand
Summary
- Cost Flows
Documents
Let’s summarize
the document
flow we have
been discussing
in a job-order
costing system.
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-26
Cost Flows and Documents
The materials
requisition
indicates the cost
of direct
materials
to charge to
jobs
and the cost of
indirect materials
to charge to
overhead.
McGraw-Hill/Irwin
Exh.
19-3
Direct
material
s
JobCost
Cost
Job
Job
Cost
Sheets
Job
Cost
Sheets
Sheets
Sheets
Materials
Materials
Ledger
Cards
Materials
Ledger
Cards
Materials
Ledger Cards
Requisition
Indirect
materials
Factory
Overhead
Account
© The McGraw-Hill Companies, Inc., 2005
19-27
Job Cost Costing
Document
FlowDocuments
Summary
Cost
Flows and
Direct
Employee time
Labor
tickets indicate
the cost of
Employee Time
direct labor
Employee
Time
Ticket
Employee
Time
to charge to Employee
Ticket
Time
Ticket
jobs
Ticket
and the cost
of indirect labor
to charge to
Indirect
Labor
overhead.
McGraw-Hill/Irwin
Exh.
19-6
JobCost
Cost
Job
Job
Cost
Sheets
Job
Cost
Sheets
Sheets
Sheets
Factory
Overhead
Account
© The McGraw-Hill Companies, Inc., 2005
19-28
2. Job Order Cost Flows and Reports
- Summary of Cost Flows
Let’s examine the
cost flows in a job
order system.
We will use
T-accounts and
start with
materials.
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-29
Summary of Cost Flows
Raw Materials
Material
Direct
Purchases Material
Indirect
Material
Exh.
19-11
Goods in Process
Direct
Material
Factory Overhead
Actual
Overhead
Costs
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-30
Summary of Cost Flows
Next let’s add
labor costs and
applied factory
overhead to the
job order cost
flows. Are you
with me?
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-31
Flow of All Job Order Costs
Summary of Cost Flows
Factory Payroll
Incurred
Direct
Labor
Indirect
Labor
Factory Overhead
Actual
Overhead
Overhead Applied to
Costs
Work in
Process
McGraw-Hill/Irwin
Exh.
19-11
Goods in Process
Direct
Material
Direct
Labor
Overhead
When
Actual
Applied
factory = factory
overhead
overhead
an adjustment is needed.
We will look at how to
accomplish this later.
/
© The McGraw-Hill Companies, Inc., 2005
19-32
Summary of Cost Flows
Now let’s
complete the
goods and sell
them. Still with
me?
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-33
Summary of Cost Flows
Goods in Process
Direct
Material
Direct
Labor
Overhead
Cost of
Goods
Mfd.
Exh.
19-11
Finished Goods
Cost of
Goods
Mfd.
Cost of
Goods
Sold
Cost of Goods Sold
Cost of
Goods
Sold
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-34
Job Cost Costing
Summary Application
3.Document
OverheadFlow
and Overhead
Indirect
Material
Indirect
Labor
Factory
Overhead
Account
Predetermined
Overhead Rate
Exh.
19-6
Job Cost
Sheets
Vouchers
Adjusting
Entries
Factory Overhead Account: Temporary Account,
accumulate cost until allocated to Jobs
Overhead is not directly associate with specific jobs
Allocate estimated overhead to jobs with
predetermined overhead rate
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-35
Overhead Application
Tell me again how
we use the POHR to
assign overhead
to jobs.
McGraw-Hill/Irwin
We multiply the POHR
times the number of
activity units (direct labor
cost for Road Warriors)
incurred for the job.
© The McGraw-Hill Companies, Inc., 2005
19-36
Overhead Application
I don’t get it!
Show me an
example.
McGraw-Hill/Irwin
We multiply the POHR
times the number of
activity units (direct labor
cost for Road Warriors)
incurred for the job.
© The McGraw-Hill Companies, Inc., 2005
19-37
Question
If FishCo budgets overhead at $200,000 and
estimates its activity to be 25,000 direct labor
hours for 2005, what is the POHR per direct
labor hour?
a.
b.
c.
d.
McGraw-Hill/Irwin
$10.00 per hour
$ 6.00 per hour
$ 8.00 per hour
$12.00 per hour
© The McGraw-Hill Companies, Inc., 2005
19-38
Question
If FishCo budgets overhead at $200,000 and
estimates its activity to be 25,000 direct labor
hours for 2005, what is the POHR per direct
labor hour?
a.
b.
c.
d.
McGraw-Hill/Irwin
$10.00 per hour
$ 6.00 per hour
$ 8.00 per hour
$12.00 per hour
Estimated Overhead
Estimated Activity
$200,000
25,000 hours
POHR = $8.00 per hour
© The McGraw-Hill Companies, Inc., 2005
19-39
Question
If FishCo actually worked 24,000 direct labor
hours for 2005, what amount of overhead
would be assigned to jobs in goods in
process?
a.
b.
c.
d.
McGraw-Hill/Irwin
$200,000
$192,000
$208,000
$196,000
© The McGraw-Hill Companies, Inc., 2005
19-40
Question
If FishCo actually worked 24,000 direct labor
hours for 2005, what amount of overhead
would be assigned to jobs in goods in
process?
a.
b.
c.
d.
McGraw-Hill/Irwin
$200,000
$192,000
$208,000
$196,000
24,000 hours
× $8.00 per hour
= $192,000
© The McGraw-Hill Companies, Inc., 2005
19-41
Overhead and Overhead Application
Reasons for using a
predetermined overhead rate
Overhead is not
incurred uniformly
during the year.
Actual overhead rate
might vary from
month to month.
Predetermined rate
makes it possible to
estimate job costs sooner.
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-42
4. Adjusting of Overapplied & Underapplied
Overhead
The POHR is based
on estimates.
What happens if
actual results differ
from the estimates?
McGraw-Hill/Irwin
The result will be either
underapplied or overapplied
overhead and we
will adjust Cost of Goods
Sold at the end of the period.
Here, let me show you.
© The McGraw-Hill Companies, Inc., 2005
19-43
Adjusting of Overapplied & Underapplied
Overhead
Overhead is
overapplied.
Actual
overhead
costs
incurred
Overhead
applied to
Work in Process
(POHR × Activity)
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-44
Adjusting of Overapplied & Underapplied
Overhead
Overhead is
underapplied.
Overhead
applied to
Work in Process
Actual
overhead
costs
incurred
McGraw-Hill/Irwin
(POHR × Activity)
© The McGraw-Hill Companies, Inc., 2005
19-45
Adjusting of Overapplied and
Underapplied Overhead
Adjusting Cost of Goods Sold for
underapplied or overapplied overhead
Cost of Goods
Overhead is:
Sold is:
Adjustment will:
Actual overhead >
applied overhead
Underapplied
Too low
Increase Cost
of Goods Sold
Actual overhead <
applied overhead
Overapplied
Too high
Decrease Cost
of Goods Sold
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-46
Question
FishCo had actual manufacturing overhead
costs of $180,000. FishCo applied $192,000
of manufacturing overhead to jobs based on
a POHR of $8.00 per direct labor hour.
FishCo’s manufacturing overhead is:
a.
b.
c.
d.
McGraw-Hill/Irwin
$12,000 overapplied.
$12,000 underapplied.
$96,000 overapplied.
$96,000 underapplied.
© The McGraw-Hill Companies, Inc., 2005
19-47
Question
FishCo had actual manufacturing overhead
costs of $180,000. FishCo applied $192,000
of manufacturing overhead to jobs based on
a POHR of $8.00 per direct labor hour.
FishCo’s manufacturing overhead is:
a.
b.
c.
d.
McGraw-Hill/Irwin
$12,000 overapplied.
$12,000 Applied
underapplied.
overhead
$96,000 Less
overapplied.
actual overhead
overhead
$96,000 Overapplied
underapplied.
$ 192,000
180,000
$ 12,000
© The McGraw-Hill Companies, Inc., 2005
19-48
Question
The difference between FishCo's actual
and applied overhead will result in
an adjustment that decreases
cost of goods sold.
a. True
b. False
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-49
Question
The difference between FishCo's actual
and applied overhead will result in
an adjustment that decreases
cost of goods sold.
a. True
b. False
McGraw-Hill/Irwin
If overhead is overapplied, cost
of goods sold is too high. The
adjustment will decrease cost of
goods sold.
© The McGraw-Hill Companies, Inc., 2005
19-50
5. Job Order Costing
- Typical Accounting Entries
Let’s look at the accounting
journal entries for a job order
cost system. We’ll omit the
numbers so that we can focus
on accounts.
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-51
Job Order Costing
Typical Accounting Entries (Material Purchasing)
GENERAL JOURNAL
Date
Description
Raw Materials Inventory
Accounts Payable
Page 21
Post.
Ref.
Debit
Credit
XXXXX
XXXXX
Acquired materials on credit for
use in the factory.
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-52
Job Order Costing
Typical Accounting Entries
(Direct Material & Indirect Material Requisition)
GENERAL JOURNAL
Date
Description
Goods in Process Inventory
Raw Materials Inventory
Page 21
Post.
Ref.
Debit
Credit
XXXXX
XXXXX
To record use of direct material.
Factory Overhead
Raw Materials Inventory
To record use of indirect materials.
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-53
Job Order Costing
Typical Accounting Entries (Labor Cost)
GENERAL JOURNAL
Date
Description
Factory Payroll
Cash
Page 21
Post.
Ref.
Debit
Credit
XXXXX
XXXXX
To record factory salaries and wages.
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-54
Job Order Costing
Typical Accounting Entries
(Indirect & Direct Labor Cost)
GENERAL JOURNAL
Date
Description
Goods in Process
Factory Payroll
Page 21
Post.
Ref.
Debit
Credit
XXXXX
XXXXX
To record direct labor.
Factory Overhead
Factory Payroll
To record indirect labor.
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-55
Job Order Costing
Typical Accounting Entries (Actual Overhead Incurred)
GENERAL JOURNAL
Date
Description
Factory Overhead
Page 21
Post.
Ref.
Debit
Credit
XXXXX
Prepaid Insurance
XXXXX
Accrued Utilities Payable
XXXXX
Cash
XXXXX
Accumulated Depreciation
XXXXX
To record factory overhead items.
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-56
Job Order Costing
Typical Accounting Entries (Overhead Application)
GENERAL JOURNAL
Date
Description
Goods in Process
Factory Overhead
Page 21
Post.
Ref.
Debit
Credit
XXXXX
XXXXX
To apply overhead using a
predetermined overhead rate
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-57
Job Order Costing
Typical Accounting Entries
(Completed Goods transferred to Finished Goods Inventory)
GENERAL JOURNAL
Date
Description
Finished Goods Inventory
Goods in Process Inventory
Page 21
Post.
Ref.
Debit
Credit
XXXXX
XXXXX
To record the transfer of completed
goods out of production.
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-58
Job Order Costing
Typical Accounting Entries
(Goods Sold and Transferred out of Finished Goods Inventory)
GENERAL JOURNAL
Date
Description
Cost of Goods Sold
Finished Goods Inventory
Page 21
Post.
Ref.
Debit
Credit
XXXXX
XXXXX
To record cost of goods sold.
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005
19-59
End of Chapter 19
McGraw-Hill/Irwin
© The McGraw-Hill Companies, Inc., 2005