Cost Accounting help

[jon234]

So I am seeking assistance with some cost accounting that I sort of understand but not to the extent of I can solve it 100% any assistance is much appreciated as I am a bit lost at where I exactly mucked up on in the journal entries. ( I know some are blank ) and the textbook I have and notes arent that useful.



The Journal I am mucked up on


Cost sheet and ending balances ( dont quite understand translation from journal to cost sheet ) but my journal is also wrong which has a fair amount to do with that

[Themius]

Ah I remember all of this from accounting. Wasn't my favorite time but it is easy enough.

[jon234]

Ah I remember all of this from accounting. Wasn't my favorite time but it is easy enough.

Yeah I have a vague understanding of it but taking it over a winterm its not the best and being given the worst source material for notes and references makes it worse.

[zEmini]

okay i was wrong. Did that textbook fill in those account names for you?

[zEmini]

Well this seems pretty clear cut.
Your May 1 entry is correct
Your May 3 entry is essentially correct though I would split the debit balance per job with individual notes on the actual journal to better be able to track the transactions.
I'd follow the same principle for attributing wages payable to WIP (individual entries per job). On the Overhead, you will attribute to WIP at the dictated cost per hour for the hours incurred thus 4,7x780/610/400 per job
You transfer the accounts noted for Jobs 58/59 to Finished Goods
Then you debit accounts receivable and credit revenue and debit cost of goods sold and debit finished goods for jobs 57/58
On your job orders, just note the numbers for materials, direct labor and overhead as per the journal notes (thus I suggested doing it per job though ofc you can just have a working for those calculations and then reference the working)

- - - Updated - - -



Purchase on account is a credit purchase

You are right. I was thinking people who pay their bills "on account" which means for me, they are paying off their balance with cash.

[jon234]

Just curious, in class does your professor favor workings or notes on journals? Most professors prefer workings but in actual practice accountants prefer to just post transactions in detail with notes on the entries so as to make it easier to understand what happened a year later when they are checking that account. If they do prefer workings, start with something like this:

Working 1
Direct Labor per Job
Job 58 19X780=14820
Job 59 19X610=11590
Job 60 19X400=7600

Working 2
Overheads charged to Production
Job 58 4,70X780=3666
Job 59 4,70X610=2867
Job 60 4,70X400=1880
Total 8413

Then when you reference those numbers right on a parenthesis (W1) and (W2)

My professor doesnt specify but I am more or less confused about the May 31st entry I understand I have to debit Overhead control for 17850 but I dont get where to get the credit numbers from I know the account would be various payables ( accounts payable and wages payable as well not 100% sure on this ) but im a bit lost on how to pull the number for the credit for this entry

[jon234]

Overheads can be any number of expenses. As the exercise says, Credit Various Payables, Debit Overhead Control for the full amount. Then since they have been paid in full, Debit Various Payables and then Credit Cash.
After you've done that and gotten the 17850 to the Overhead Control account, you debit to Work in Process, 4,70 per direct labour hour per job; in the previous entry you can see that it gives you the labour hours so just multiply the labor hours for each job by 4,70. This will not cover the entire overhead which is pretty much the only tricky point in this exercise. As you can see in the working you quoted you are only debiting 8413 to WiP (and crediting the Overhead Control) so on May 31 Overhead Control will have a debit balance of the remainder (9437)

I got most of the journal correct now other than ( cost order sheets are also fine the ending balance calculations are off because of this part of the journal )

any idea where I messed up here?