KL Company Uses a Job Order Costing System

question 10

Essay

KL Company uses a job order costing system. During the month of July, the following events occurred:
(a) Purchased raw materials on credit, $32,000.
(b) Raw materials requisitioned: $25,800 as direct materials and $10,500 indirect materials.
(c) Assigned the factory payroll totaling $37,700, which includes $8,200 indirect labor, to jobs and overhead.
Make the necessary journal entries to record the above transactions and events.

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Definitions:

Cost Of Goods Sold

The total cost directly involved in producing goods or services, including materials and labor.

Net Income

The amount of money left after all expenses, taxes, and costs have been subtracted from a company's total revenue.

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Phantom Profits

Profits recorded in the accounting books but not actually realized through cash transactions, potentially leading to a misleading financial condition.