Tracking direct materials, Cost Accounting

Tracking Direct Materials

Jack keeps full records of the material released to each job. When Donnie gathered up light bulbs, tape, breakers, wire, and wire nuts on the morning of the 14th, some system required to be in place to "check out" this material. The document which is used for this process is known as the "materials request" or "materials requisition" form. This form will show which material is leaving the available raw materials stock and being put into the production. At times a separate form is prepared for every item, and sometimes a running list similar to the given below is used:

Castle Electric        Materials Requisition

Employee:  Donnie Odom

2240_Direct materials.png

This form gives essential documentation to safeguard and track the inventory; a manager who fails to control and monitor the inventory does so at great peril! It also reveals that "direct material" for the billboard task (Job A) was $150 i.e. the light bulb. The wire nuts and tape might have been used on the billboard will be dealt with as an overhead which is discussed later.

Before moving on to overhead, you are required to know one more thing about the "materials requisition" form; although illustrated form lists material cost, which will not always be the case. At times, a business may not be particularly interested in letting employees to see the cost information, or cost information may not be readily obtainable. In any of the case, the form will instead comprise a part or the serial number. A subsequent clerical task will be to recognize the cost of the particular parts which were put into the production. Great care should always be taken to match right cost to the right item, and in right quantity. For instance, the 500 feet of wire might be on one roll, but it is priced by the foot, and quantity must be 500 feet, not 1 roll; the job cost calculation would be bit incorrect if only $0.14 were assigned to one roll of the wire!

Posted Date: 7/21/2012 5:12:50 AM | Location : United States

Related Discussions:- Tracking direct materials, Assignment Help, Ask Question on Tracking direct materials, Get Answer, Expert's Help, Tracking direct materials Discussions

Write discussion on Tracking direct materials
Your posts are moderated
Related Questions
Kaplan Computers manufactures high end computer systems for the graphics design industry. At the present time, the company makes three computers with the following characteristics

Definition of Variance Analysis Variance analysis can merely be defined like the process of analyzing the difference between the actual cost and the standard cost this variati

Ed Mettway was concerned about his firm''s ability to acquire the necessary property, plant, and equipment to take advantage of steadily increasing sales. Touring Enterprises, esta

Explain the respective roles of the Securities and Exchange Commission (SEC) and the Internal Revenue Service (IRS) in the setting of accounting standards?

Workmen shoes accumulated the following production and cost data for the past 5 months. i)  Using the high/low method calculate the variable cost per unit and the fixed cos

Slick Corporation is a small producer of synthetic motor oil. During May, the company produced 5,000 cases of lubricant. Each case contains twelve quarts of synthetic oil. To achie

what is the procedure of purchase of materials in large organisation?

Last in first out or LIFO LIFO is based upon the assumption such the stock purchased last is issued first. Stock valuation should here be based upon the prices ruling on acqui

I just do not know which form those numbers should go in. I would canculate the results myself. Thanks John and Ellen Brite are married and file a joint return. They have no depend