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ADMS 3510 (18)


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York University
Administrative Studies
ADMS 3510
Rebecca Jubis

• Journal Entry 4: To Assign Materials to Jobs and Overhead o Example: If $24,000 of direct materials and $6,000 of indirect materials are used in January, the entry is: Work in Process Inventory 24,000 Manufacturing Overhead 6,000 Raw Materials Inventory 30,000 To assign materials to jobs and overhead -------- Factory Labour Costs Assigned • Factory labour costs are assigned to jobs on the basis of time tickets prepared when the work is performed • The time ticket indicates the employee, the hours worked, the account and job to be charged, and the total labour cost. • The Work in Process Inventory account is debited for direct labour, and Manufacturing Overheadis debited for indirect labour • Journal Entry 5: To Assign Labour to Jobs and Overhead • Example: If the $32,000 total factory labour cost incurred consists of $28,000 of direct labour and $4,000 of indirect labour, the entry is: Work in Process Inventory 28,000 Manufacturing Overhead 4,000 Raw Materials Inventory 32,000 To assign Labour to jobs and overhead ------------ Manufacturing Overhead Costs Assigned • Manufacturing overhead is assigned to work in process and to specific jobs on an estimated basisthrough the use of a predetermined overhead rate • Using a predetermined overhead rate enables a cost to be determined for a job immediately • The predetermined overhead rate is based on the relationship between estimated annual overhead costs and expected annual operating activity, expressed in terms of a common activity base • The activity may be stated in term
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