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Job Order Costing

LO 2a – Recording Transactions Using Job-Order Costing: Materials

Job Order Cost System for Manufacturing

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Materials

The materials account in the general ledger is a controlling account. A separate account for each type of material is maintained in a subsidiary materials ledger.

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The receiving report and the invoice are used to record the receipt of the merchandise and to control the payment for purchased items.

Supplier Invoice$10,500

Receiving Report No. 196

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Supplier’s Invoice$10,500

Receiving Report No. 196

750 units of No. 8 Maple

Wood

A receiving report is prepared when materials that have been ordered are received and inspected.

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If there are no discrepancies, a journal entry is made to record the purchase.

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To Materials Requisitions To Materials Requisitions(continued)

a.

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From Materials Ledger Account

b. b.

b.b.

Materials

The storeroom releases materials to use in manufacturing when a materials requisition is received. A materials requisition for Job No. 71 is shown below.

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Materials

For direct materials, the quantities and amounts from the materials requisitions are posted to job cost sheets. Job cost sheets make up the work in process subsidiary ledger. Job No. 71 is shown below.

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Materials

A summary of the materials requisitions is used as a basis for the journal entry recording the materials used for the month.

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