Describe the flow of manufacturing costs in a normal job costing system.

Expert Solution

The flow of manufacturing costs in a normal job costing system is the flow of the various costs like the direct material cost, direct labor cost and the manufacturing overhead from the point when it was incurred through the direct material stock, Work –in-process inventory and then the finished goods stock account and then finally to the cost of goods sold account. This means that in job costing the direct material and the direct labor incurred in the production are debited to the Work-in-process account and the indirect material, indirect labor and the manufacturing overhead (calculated using a predetermined rate) is taken to the Manufacturing overhead control account and from here the flow is sequentially to the finished goods inventory and from there finally to the cost of goods sold.This is done for each job undertaken.

In the Job costing system all these costs like the direct material cost, direct labor cost and the manufacturing overhead are firstly recognized and recorded and then assigned to the specific job.

ekkarill92 answered 2 years ago

describe the flow of manufacturing cost in a Job Order Cost System.

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