Alberta Corporation Uses a Job-Order Costing System

question 2

Essay

Alberta Corporation uses a job-order costing system. The following data relate to the just completed month's operations.
(1) Direct materials requisitioned for use in production, $170,000(2) Indirect materials requisitioned for use in production, $11,000(3) Direct labor wages incurred, $105,000(4) Indirect labor wages incurred, $103,000(5) Depreciation recorded on factory equipment, $38,000(6) Additional manufacturing overhead costs incurred, $63,000(7) Manufacturing overhead costs applied to jobs, $200,000(8) Cost of jobs completed and transferred from Work in Process to Finished Goods, $450,000Required:
a. Where appropriate, post the above transactions to the Work in Process and Manufacturing Overhead T-accounts.
b. Determine the underapplied or overapplied overhead for the month.

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Definitions:

Journal Entries

The method by which transactions are recorded in the general ledger in the form of debits and credits according to accounting rules.

Voucher

A voucher is a document that authorizes a payment and records details about it, acting as proof of the transaction for accounting purposes.

Net Method

An accounting practice where discounts for early payment are considered directly in the invoice price, reducing the recorded sale and purchase amounts if the discount is taken.

Periodic Inventory System

An alternative phrasing for the Periodic Inventory Method, emphasizing it as a system of managing and accounting for inventory in discrete time periods, typically annually.