Example of job order costing, Cost Accounting

Example of Job Order Costing

The given transactions were made by a company in the month of December.

Direct Materials

a) 8,000/- was bought on credit, out of these, materials worth 5,000/- were returned to the suppliers.

b) 50,000/- was issued from the store

c) Indirect materials issued amounted to 5,000/-

d) Direct wages allocated to production amounted to 20,000/-

e) Goods worth 200,000/- were sold

f)  Finished goods worth 100,000/- were transferred to the store.

g) The cost of goods sold was 140,000/-

h) Unpaid indirect expenses were 32,000/-

i)  Indirect wages allocated amounted to 15,000/-

j) Non-manufacturing overheads incurred amounted to 20,000/-

k) Overhead expenses charged to the jobs - 60,000/-


a) Prepare the stores ledger control Account

b) Factory overhead control Account

c) W.I.P. control Account

d) Costing P and L Account

Stores Ledger Control A/c

Creditors (material)


Creditors control








(Indirect materials)




Factory overheads


Factory Overheads Control Account

Stores Ledger (material)




Creditors (wages)




Incurred wages




P + LA/c




Over absorption








W.I.P Control Account

Stores Ledger (material)


Finished goods stock






Control (D wages)








Overhead expenses




Costing P and L Account

Finished goods control




Non manufacturing


Factor overhead






Costing profit




Posted Date: 2/7/2013 8:04:53 AM | Location : United States

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