Entries for Materials Kingsford Furnishings Company manufactures designer furniture. Kingsford Furnishings uses a job order cost system. Balances on April 1 from the materials ledger are as follows: Fabric $26,700 Polyester filling 8,000 Lumber 59,800 Glue 2,600 The materials purchased during April on account are summarized from the receiving reports as follows: Fabric $134,600 Polyester filling 187,100 Lumber 368,800 Glue 12,800 Materials were requisitioned to individual jobs as follows: Fabric Polyester Filling Lumber Glue Total Job 601 $51,100 $64,400 $172,200 $287,700 Job 602 39,300 70,000 150,700 260,000 Job 603 36,300 47,500 83,800 167,600 Factory overhead-indirect materials $6,600 6,600 Total $126,700 $181,900 $406,700 $6,600 $721,900 The glue is not a significant cost, so it is treated as indirect materials (factory overhead). a. Journalize the entry to record the purchase of materials in April. If an amount box does not require an entry, leave it blank. a. Materials $___________ ____________ Accounts Payable ____________ $___________ Increase materials inventory and a liability for the total of purchases. b. Journalize the entry to record the requisition of materials in April. If an amount box does not require an entry, leave it blank. b. Work in Process $______ _______ Factory Overhead $______ _______ Materials ______ $______ c. Determine the April 30 balances that would be shown in the materials ledger accounts. Fabric Polyester Filling Lumber Glue Balance, April 30 $ $ $ $
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Entries for Materials
Kingsford Furnishings Company manufactures designer furniture. Kingsford Furnishings uses a
| Fabric | $26,700 |
| Polyester filling | 8,000 |
| Lumber | 59,800 |
| Glue | 2,600 |
The materials purchased during April on account are summarized from the receiving reports as follows:
| Fabric | $134,600 |
| Polyester filling | 187,100 |
| Lumber | 368,800 |
| Glue | 12,800 |
Materials were requisitioned to individual jobs as follows:
| Fabric | Polyester Filling | Lumber | Glue | Total | ||||||
| Job 601 | $51,100 | $64,400 | $172,200 | $287,700 | ||||||
| Job 602 | 39,300 | 70,000 | 150,700 | 260,000 | ||||||
| Job 603 | 36,300 | 47,500 | 83,800 | 167,600 | ||||||
| Factory overhead-indirect materials | $6,600 | 6,600 | ||||||||
| Total | $126,700 | $181,900 | $406,700 | $6,600 | $721,900 |
The glue is not a significant cost, so it is treated as indirect materials (factory overhead).
a.
| a. |
Materials
|
$___________ | ____________ |
|
Accounts Payable
|
____________ | $___________ |
b. Journalize the entry to record the requisition of materials in April. If an amount box does not require an entry, leave it blank.
| b. |
Work in Process
|
$______ | _______ |
|
Factory Overhead
|
$______ | _______ | |
|
Materials
|
______ | $______ |
c. Determine the April 30 balances that would be shown in the materials ledger accounts.
| Fabric | Polyester Filling | Lumber | Glue | |
| Balance, April 30 | $ | $ | $ | $ |
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