Cost Accounting: Inventory, Job Costing, and Overhead Rates

Cost accounting involves the measuring, recording, and reporting of

product costs.

When a job is completed in a job order cost accounting system, the cost of the job is transferred to

finished goods inventory.

The entry when direct factory labor is assigned to jobs is a debit to

Work in Process Inventory and a credit to Factory Labor.

Wildhorse Company reported the following amounts for May: Raw materials purchased $265,000, Beginning raw materials inventory 13,100, Ending raw materials inventory 9,000, Direct labor incurred 62,000, Indirect materials requisitioned and used 5,100, Actual manufacturing overhead costs 48,000, Beginning work-in-process inventory 16,200, Ending work-in-process inventory 13,100. How much is the cost of direct materials used in production?

$264,000.

The equation for computing the predetermined manufacturing overhead rate is estimated annual overhead costs divided by an expected annual operating activity, expressed as

any of the above.

Companies assign manufacturing overhead to work in process on an estimated basis through the use of a(n)

predetermined overhead rate.