Management Accounting Ch02

Under a job order system, the company assigns costs to each job, or each batch of goods, to fill a specific customer order or replenish inventory.

Chapter 2

Manufacturing costs incurred in a job order system are accumulated by debits to Purchases, Factory Labor, and Manufacturing Overhead.

Chapter 2

Each debit to Work in Process Inventory must be accompanied by a corresponding posting to one or more job cost sheets.

Chapter 2

Manufacturing overhead costs cannot be traced directly to a specific job.

Chapter 2

The requisition of factory supplies to production requires a debit to the Manufacturing Overhead account.

Chapter 2

Actual overhead costs are debited to the Manufacturing Overhead account.

Chapter 2

The entry to record the cost of goods sold includes a debit to Finished Goods Inventory.

Chapter 2

A debit balance in the Manufacturing Overhead Account at the end of the period indicates that overhead has been overapplied.

Chapter 2