Chapter 3 - Job Order Costing

JE for when Raw Materials are purchased

Raw Materials xx

            Cash/AP        xx

JE for when Raw Materials are USED in production

WIP Inventory xx

Raw Material Inventory xx

JE for when INDIRECT MATERIAL are USED

Manu OH xx

Raw Materials Inventory xx

JE for when Direct Labor is recorded

WIP Inventory xx

Cash/Wages Pay. xx

JE for when INDIRECT LABOR is recorded

Manu OH xx

Cash/Wages Pay. xx

Actual overhead (as recorded on Job cost sheets) is…

Debited

Applied Overhead is…

Credited

Manufacturing overhead is what kind of account?

Temporary! Meaning it is closed to COGS

JE to close Manu. OH

Depends on whether Manu OH is over or under applied

Debit WIP Inventory when

• DM are used

• DL are recorded

• OH is APPLIED

Debit FG Inventory when

Inventory is completed

Debit COGS when

Inventory is sold