Following are the selected account balances of Delray Mfg: Sales $1,200,000 Raw materials...


Following are the selected account balances of Delray Mfg:

Raw materials inventory, Dec. 31,201440,000
Work in process inventory, Dec.31,201455,600
Finished goods inventory, Dec.31,201467,000
Raw materials purchases173,900
Direct labor 244,000
Factory computer supplies used 18,700
Indirect labor 43,000
Repairs-Factory equipment 5,250
Rent cost of factory building55,000
Advertising expense 82,000
General and administrative expenses 128,000
Raw materials inventory, Dec.31,201547,600
Work in process inventory, Dec.31,201543,500
Finished goods inventory, Dec.31,201574,000

Prepare an income statement for Delray Mfg (a manufacturer). Assume that the cost of goods manufactured is $544,350.

Job order cost system

Job order costing is used to assign manufacturing costs to each and individual jobs. A company usually prepared job order cost sheet to calculate cost of foods manufactured and cost of goods sold.

Answer and Explanation: 1

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Sales 1,200,000
Less:Cost of goods -537,350.00
Gross Profit 662,650.00
Less: Advertising expense -82,000.00
General and administrative...

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Job Order Cost System for Service Companies


Chapter 5 / Lesson 9

The job order cost system is a way for service companies to assign costs since they do not sell physical products. Study the differences between manufacturing and service, and learn about the job order costing system through an example.

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