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:

Depreciation

The accounting method of allocating the cost of a tangible asset over its useful life.

Sales Commissions

Payments made to sales employees or agents based on the sales volume they achieve.

Factory Overhead

Factory overhead encompasses all indirect costs associated with the manufacturing process, including utilities, maintenance, and management salaries.

Amortization

The periodic transfer of the cost of an intangible asset to expense or of a bond discount to interest expense.