3.5: Journal Entries For the Flow of Production Costs
- Page ID
- 26047
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The journal entries for the flow of production costs are the same with process and job costing. The cost flow is as follows:
The corresponding journal entries to the letters in the flow chart are:
| Journal Entries by account flow (see referenced letter) | |||
| Ref | Account / Description | Debit | Credit |
| a | Raw Materials Inventory | X | |
| Cash or Accounts Payable | X | ||
| Purchased raw materials inventory | |||
| b | Factory Payroll | X | |
| Wages Payable | X | ||
| Record wages earned but unpaid | |||
| c | These are examples of some of the entries you may record: | ||
| Manufacturing Overhead | X | ||
| Accumulated Depreciation | X | ||
| Record depreciation on factory equipment | |||
| Manufacturing Overhead | X | ||
| Cash | X | ||
| Record factory rent paid with cash | |||
| Manufacturing Overhead | X | ||
| Accounts Payable | X | ||
| Record factory supplies purchased on credit | |||
| d | Work in Process Inventory | X | |
| Raw Materials Inventory | X | ||
| Record Direct Materials Used | |||
| e | Manufacturing Overhead | X | |
| Raw Materials Inventory | X | ||
| Record INDIRECT materials used | |||
| f | Work in Process Inventory | X | |
| Factory Payroll | X | ||
| Record Direct Labor | |||
| g | Manufacturing Overhead | X | |
| Factory Payroll | X | ||
| Record INDIRECT labor | |||
| h | Work in Process Inventory | X | |
| Manufacturing Overhead | X | ||
| Record Overhead APPLIED to production | |||
| i | Finished Goods Inventory | X | |
| Work in Process Inventory | X | ||
| Record jobs or goods completed (cost of goods manufactured) | |||
| j | Cost of goods sold | X | |
| Finished Goods Inventory | X | ||
| Record cost of jobs or goods completed AND sold | |||
For a printable view click job cost flow.