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Two Types of Costing Systems

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 ow of Costs

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mourna EntriesŹRaw
Materia s
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$  %#   
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mourna EntriesŹRaw
Materia s
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%  '!
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mourna actory Labor and
Overhead Labor 
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Note: if more than one Job is being debited, then subsidiary ledgers for
Each job will be debited also. For example if the work in process consisted of
$20,000 of payroll going into Job 1 and $5,000 going into job 2, then you
would also Debit Job 1 WIP $20,000, and Job 2 WIP $5,000. The work in
process and Finished goods are control accounts.
mourna ŹTransfer from Work
in Process to inished Goods 

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mourna ŹTransfer from 
inished Goods To COGS 
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Overhead

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Three Overhead Categories

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Overhead Rate ormu a

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Overhead Examp e

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6udget

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àctua Data Year End

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Overhead àpp ied

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Overhead àccount and Work in
Process àccounts
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Overhead àccount and Work in
Process àccounts
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"# %%.

 # %% ('!
Overhead àccount and Work in
Process àccounts
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6rief Exercise Three

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6rief Exercise our

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Genera mourna Entry
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6rief Exercise Six
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6rief Exercise Six
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Exercise 22

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Source Documents
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80. -0/,, -+.,,
87, 7/,, 7,,,
87+ 88,, 45,,
=  -+,8,, -+0/,,
>%  9,, +0,,
  -++0,, -+74,,

Miller applies overhead to jobs at an overhead rate of 80% of direct
labor cost. Job 429 is completed during the month.
Prepare Summary mourna s to
Record
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 3 
—     3 80.
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  3    
To Record Materia s and Labor

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"  9,,
ë " # ++0,,

' (  " # +0/,,  
"  +0,,
$ #  +74,,
To Record Overhead and inished
Goods Inventory
' (  " # +,,,,  

"  +,,,,
:-+0/,,? 9,;<

$   " # 4.0,
' (  " # 4.0,
:-0,,,@-0/,,@-+.,,
@+/0,<
Work in Process Inventory
àccount 
#+ 70,, #7+4.0, 
#7++,8,, 
#7++0/,, 
#7++,,,,
09+9,
mob Cost Sheets 

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87, +0,, 7/,, 7,,, 08,, +,+,,

87+ 88,, 45,, 5,9, +9,9,

+0,, 4.,, +,5,, 989, 09+9,

Ú !     "   
Remaining Prob ems to 6e Worked
on Exce or on 6oard