ECONOMICS

Detailed explanation-1: -In a job-order cost system, each entry to the Work In Process Inventory account is based on each job. Direct materials requisitioned from the storeroom should be recorded in the job cost sheets for the individual jobs on which the materials were used.

Detailed explanation-2: -Work-In-Process Inventory includes all the direct materials, direct labor and manufacturing overhead costs that have been added to the manufacturing process but for which production has not been completed. Finished Goods Inventory includes all manufacturing costs for products that have been completed but not sold.

Detailed explanation-3: -The basic flow of costs in a job-order system begins by recording the costs of material, labor, and manufacturing overhead. a. Direct material and direct labor costs are debited to the Work In Process account.

Detailed explanation-4: -Your business can use job order costing and process costing to track production costs and allocate expenses, such as time, materials and labor, to your products, and both use about the same information to calculate unit cost.