Question

Do It! Exercise 15A-1 During the current month, Wacholz Company incurs the following manufacturing costs. (a) (b) (c) Purchased raw materials of $18,000 on account. Incurred factory labor of $40,000. Factory utilities of $3,100 are payable, prepaid factory property taxes of $2,700 have expired, and depreciation on the factory building is $9,500. Record the company's manufacturing costs in its job order costing system. Manufacturing Costs Raw Materials Inventory Factory Labor Manufacturing Overhead Purchased raw materials $ $ Incurred factory labor Factory utilities Factory property taxes Factory depreciation Balance Click if you would like to Show Work for this question: Open Show Work

Answer 1

Job order costing system allocates manufacturing costs of an individual unit of output to various jobs.

According, to the job order system costs includes Cost of materials, Labor and manufacturing overhead.

(1) Raw material purchase = increase Raw material inventory

(2) Factory labor = Increase in labor cost

(3) Any cost related to factory is considered manufacturing overhead

Factory utilities payable = manufacturing overhead

expired factory insurance = manufacturing overhead

depreciation on factory building = Manufacturing overhead

Manufacturing costs:

	raw material inventory	Factory labor	Manufacturing overhead
Purchased raw materials	$18,000
Incurred factory labor		$40,000
Factory utilities			$3,100
Factory property taxes			$2,700
Factory depreciation			$9,500
Balance	$18,000	$40,000	$15,300 ($3,100+$2,700+$9,500)