Question

What are the manufacturing overhead costs?

Assigned costs to products using a predetermined overhead rate using a standard costing system, as discussed, job costing, and manufacturing activity-based costing.

Assume manufacturing overhead costs are often called overhead costs applied to products going through the Assembly department.

The journal entry reflect manufacturing overhead costs applied to products going through the Finishing department is as follows:

Transferred-In Costs

The costs associated with manufacturing should transfer from the work-in-process inventory account for the production account work-in-process inventory account for the Finishing department. Thus these costs are being transferred into the Finishing department. The journal entry to reflect this is as follows:

Finished Goods

Question: Goods and ready to sell once they have gone through the final production department. The last production department at Desk Products, Inc., is the Finishing department. How do we record production costs for products moved from the final production department to the finished goods warehouse?

Cost of Goods Sold

Once the completed goods sold, the related costs are moved out of the finished goods inventory account and into the cost of goods sold.

Answer 1

Answer-1

• Journal Entry to record Manufacturing overhead which is applied to products going through the Assembly department,

  • Particulars	Debit	Credit
    Work in Process Inventory : Assembly Department	XXX
    Manufacturing Overhead		XXX

• Journal Entry to record Manufacturing overhead which is applied to products going through the Finishing department,

  • Particulars	Debit	Credit
    Work in Process Inventory : Finishing Department	XXX
    Manufacturing Overhead		XXX

Answer-2

• Journal Entry to transfer/record cost related Manufacturing to the Finishing department,

  • Particulars	Debit	Credit
    Work in Process Inventory : Finishing Department	XXX
    Work in Process Inventory : Production Department		XXX

Answer-3

• Journal Entry to record/transfer costs for products moved from the final production department to the finished goods warehouse,

  • Particulars	Debit	Credit
    Finished Goods Inventory	XXX
    Work in Process Inventory : Finishing Department		XXX

Answer-4

• Journal Entry to record costs related to products from Finished Goods Inventory to Cost of Goods Sold

  • Particulars	Debit	Credit
    Cost of Goods Sold	XXX
    Finished Goods Inventory		XXX