COST ACCOUNTING
JOB ORDER COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Raw Materials Inventory account
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Work in Process Inventory account
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Finished Goods Inventory account
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Cost of Goods Sold account
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Detailed explanation-1: -Answer and Explanation: Correct Answer: Option A) Work in Process Inventory.
Detailed explanation-2: -The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead and a debit to: Jobs Overhead Expense.
Detailed explanation-3: -The overhead account is debited for the actual overhead costs as incurred. The overhead account is credited for the overhead costs applied to production in the work-in-process account.
Detailed explanation-4: -In a job-order costing system, the journal entry to record the application of overhead cost to jobs would include: a credit to the Manufacturing Overhead account.
Detailed explanation-5: -Applied overhead is overhead added to a job by taking the predetermined overhead rate multiplied by the actual activity. Applied overhead is added to direct materials and direct labor to calculate total job cost. Every time a job is completed, overhead is applied to the job.