Dieker Company begins operations on January 1. Because all work is done to customer specifications, the company decides to use a job order cost system. Prepare a chart of a typical job order cost system showing the increases and decreases that result from the eight transactions illustrated in the chapter. Use Illustration 12.24 as a reference. Record the accumulation of manufacturing costs.

Data From Illustration 12.24

Flow of costs in a job order cost system

Transcribed Image Text:

Flow of Costs WORK IN FINISHED PROCESS GOODS COST OF MANUFACTURING COSTS INVENTORY INVENTORY GOODS SOLD Raw Factory Labor Materials Manuf. Overhead Inventory Accumulation Assignment (1) (2) (3) +$42,000 +$32,000 1. Purchase raw 4. Raw materials are +$4,800 +2,000 materials used 5. Factory labor is used 6. Overhead is applied 7. Completed goods are recognized 8. Cost of goods sold is recognized (3) (3) (3) 2. Incur factory labor +2,600 3. Incur +3,000 manufacturing overhead (3) (4) (4) (5) +1,400 -24,000 +$24,000 -6,000 +6,000 -28,000 +28,000 (5) (6) -4,000 +4,000 -22,400 +22,400 +$39,000 -39,000 (7) -39,000 (8) +$39,000 Ending balance $12,000 $ $1,400 $35,400 $ $39,000