Question

Create a diagram of a job order cost system or a process cost system. Choose a product that you will manufacture and describe the manufacturing process for it using a flow chart or mind map. The chart should include the major steps in the process and the journal entries (debits and credits) which would be recorded at each step. You may use shapes, pictures, and text to describe the production process. Create a diagram of a job order cost system or a process cost system. Choose a product that you will manufacture and describe the manufacturing process for it using a flow chart or mind map. The chart should include the major steps in the process and the journal entries (debits and credits) which would be recorded at each step. You may use shapes, pictures, and text to describe the production process.

Answer 1

Journal Entries by account flow (see referenced letter)
Ref	Account / Description	Debit	Credit
a	Raw Materials Inventory	X
	Cash or Accounts Payable		X
Purchased raw materials inventory
b	Factory Payroll	X
	Wages Payable		X
Record wages earned but unpaid
c	These are examples of some of the entries you may record:
	Manufacturing Overhead	X
	Accumulated Depreciation		X
Record depreciation on factory equipment
	Manufacturing Overhead	X
	Cash		X
Record factory rent paid with cash
	Manufacturing Overhead	X
	Accounts Payable		X
Record factory supplies purchased on credit
d	Work in Process Inventory	X
	Raw Materials Inventory		X
Record Direct Materials Used
e	Manufacturing Overhead	X
	Raw Materials Inventory		X
Record INDIRECT materials used

Ref	Account / Description	Debit	Credit
f	Work in Process Inventory	X
	Factory Payroll		X
Record Direct Labor
g	Manufacturing Overhead	X
	Factory Payroll		X
Record INDIRECT labor
h	Work in Process Inventory	X
	Manufacturing Overhead		X
Record Overhead APPLIED to production
i	Finished Goods Inventory	X
	Work in Process Inventory		X
Record jobs or goods completed (cost of goods manufactured)
j	Cost of goods sold	X
	Finished Goods Inventory		X
Record cost of jobs or goods completed AND sold