Principles of Managerial Accounting · free preview
Tracing Product Costs through the Inventory Accounts
Product costs flow from raw materials through work in process to finished goods and finally to cost of goods sold, with documents like requisitions and time tickets recording each movement between accounts.
1. The physical flow
The physical flow
2. Documents at each stage
Documents at each stage
3. A numeric trace
A numeric trace
4. Why the trace matters
Why the trace matters
5. Document for materials release
Which document authorizes the storeroom to release materials to production?
6. Time ticket purpose
What does a time ticket record? Use the figures from the worked example in this lesson and state the result in the requested units.
7. Completion transfer
A job costing 13,000 dollars finishes production. Which entry records its movement?
8. Sale transfer
When the job sells for 18,000 dollars at 13,000 dollars cost, which entry records the cost side?
9. Work in process accumulates
Work in process accumulates direct materials, direct labor, and applied ____ until the job completes. One word.
10. Job total cost
A job takes 4,000 dollars of materials, 6,000 dollars of labor, and 3,000 dollars of applied overhead. Compute total job cost in dollars, number only.
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