TOPIC 1: JOB ORDER COSTING SYSTEM OVERVIEW

Learning Activity 7-1

1. Job Order Cost it is the system used when many different products are produced each period or when
products are made based on specific customers' order.
2. List at least three (3) manufacturing companies that use the Job Order Costing system.
a. Aircraft
b. Auto Repair
c. Construction Company

TOPIC 2: PRODUCT FLOW IN JOB ORDER COSTING 

Learning Activity 7-2
1. Manufacturing costs incurred in each job is accumulated separately in a Work in Process Inventory
and transferred to Finished Goods Inventory once completed?
2. Elements of Cost are accumulated separately in work in process in each Job Order and transferred to
Finished Goods Inventory and to Cost of Goods Sold?

TOPIC 3: FLOW OF COSTS IN JOB ORDER COST SYSTEM

Learning Activity 7-3
Arrange in order the flow of costs in the Job Order Costing System:
1. __5__ Application of factory overhead to work in process.
2. __1__ Purchase of direct and indirect materials and return of materials to suppliers.
3. __7__ Transfer of completed jobs to finished goods.
4. __4__ Incurrence of manufacturing overhead or other indirect resources.
5. __2__ Issuance of direct and indirect materials in the production and return of materials to the
storeroom.
6. __8__ Sale of Finished Goods 
7. __6__ Incurrence of non-manufacturing expenses.
8. __9__ Transfer of finished goods to the cost of goods sold
9. __3__ Incurrence, distribution, and payment of payroll and accrual of employer’s share in various
contributions.

TOPIC 4: MEASURING COSTS IN JOB ORDER COSTING: BILL OF MATERIALS AND

MATERIALS REQUISITION SLIP, EMPLOYEE TIME TICKET, AND JOB COST SHEET
Learning Activity 7-4
1. Bill of Materials this document shows the list of all types of required materials to produce a product
along with their respective quantities and costs
2. Materials Requisition Slip this document was prepared by the production department and approved
by the production head and it controls the flow of materials into production?
3. Employee Time Ticket or Time Report this document contains the total hours spent for each job and
a description of the work and task performed?
4. _____________________ this is the key document in Job Order Costing the accounts for all cost of
direct materials, direct labor, and factory overhead incurred for a particular job, and it served also as a
subsidiary ledger to the work in process account?

TOPIC 5: COMPREHENSIVE ILLUSTRATION – JOB ORDER COSTING (NORMAL – COSTING)

- ACCOUNTING FOR MATERIALS, ACCOUNTING FOR LABOR, ACCOUNTING FOR
MANUFACTURING COST, AND COST OF GOODS MANUFACTURED AND SOLD
Learning Activity 7-5
1. What is the journal entry for the issuance of direct materials and indirect materials to production
amounting to P50,000.00 and P5,000.00 respectively?
Work in Process Inventory 50,000.00
Factory Overhead 5,00.00
Raw Materials Inventory 55,000.00
to record materials issued to production

2. Depreciation expense on factory equipment used in the manufacturing of a product is debited to

Factory Overhead Control and credited to Accumulated Depreciation – Factory Equipment
3. Factory overhead applied to production is based on the predetermined overhead rate multiplied by the
application base used by the company is debited to Work in Process Inventory and credited to
Applied Factory Overhead

TOPIC 6: ACCOUNTING TREATMENT FOR UNDERAPPLIED AND OVERAPPLIED

OVERHEAD
Learning Activity 7-6 
1. Underapplied or overapplied factory overhead is closed out to Cost of Goods Sold when the amount
of overhead variance is insignificant?
2. Underapplied or overapplied factory overhead variance significant in amount will be allocated to
Work in Process, Finished Goods, and Cost of Goods Sold.
3. Factory Overhead Control This account will be used for the closing of overapplied or underapplied
factory overhead to Work in Process, Finished Goods, and Cost of Goods Sold?