For each item below indicate the source documents that would most likely authorize the journal entry in a job-costing system.
A) materials requisition record
B) job-cost record
C) sales invoice
D) labour time card
E) purchase invoice
F) labour time card
74) direct materials purchased
75) direct materials used
76) direct manufacturing labour
77) indirect manufacturing labour
78) finished goods control
79) cost of goods sold
4.5 Analyze the flow of costs from direct and indirect cost pools to inventory accounts, including adjustments for over- and underallocated costs.
1) The Work-in-Process Control account tracks job costs from the time jobs are started until they are completed.
2) Underallocated indirect costs cannot occur when normal costing is used.
3) Proration is the equalization of the overhead allocation rates between finished goods inventory and work-in-process inventory.
4) Instead of proration, a company could choose to simply write-off the balance of any underallocated overhead to cost of goods sold providing the amount is immaterial.
5) The balance in the manufacturing overhead allocated account, is carried over to the balance sheet for the subsequent year, to properly track all costs for job costing.
