Job order costing system Custom Products, which uses a job order cost system, co

Question

Job order costing system
Custom Products, which uses a job order cost system, completed the following
transactions during the current month.
(a) Materials costing $65,000 were used on various jobs
(b) Time cards of direct workers indicate direct labor costs of $100,000 for the month
(c) Overhead is applied to jobs at a rate of 80% of direct labor cost
(d) Jobs with total accumulated costs of $150,000 were finished during the month
(e) Units costing $175,000 were sold during the month at sales prices totaling
$350,000. All sales were on account (accounts receivable). Custom Products
uses a perpetual inventory system.
In the space provided, prepare a general journal entry summarizing for the month each of the above categories of transactions. Explanations may be omitted.

Explanation / Answer

a) jobs account dr. $65000 To Materials account $65000 (being materials used on various jobs) b) jobs account dr. $100000 To Direct Labour account $100000 c) Jobs Account dr $80000 To Overheads Account $80000 d) Finished goods account dr. $150000 To Jobs account $150000 e)Cash/Bank account dr $350000 To Sales Account $350000

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