Almeda Products, Inc., uses a job-order costing system. The company's inventory balances on April 1, the start of its fiscal year, were as follows:
During the year, the following transactions were completed: a. Raw materials were purchased on account, 170,000 . b. Raw materials were issued from the storeroom for use in production, 180,000(80% direct and 20% indirect). c. Employee salaries and wages were accrued as follows: direct labor, 200,000 ; indirect labor, 82,000 ; and selling and administrative salaries, 90,000 . d. Utility costs were incurred in the factory, 65,000 . e. Advertising costs were incurred, 100,000 . f. Prepaid insurance expired during the year, 20,000(90% related to factory operations, and 10% related to selling and administrative activities). g. Depreciation was recorded, 180,000(85% related to factory assets, and 15% related to selling and administrative assets). h. Manufacturing overhead was applied to jobs at the rate of 175% of direct labor cost. i. Goods that cost 700,000 to manufacture according to their job cost sheets were transferred to the finished goods warehouse. j. Sales for the year totaled 1,000,000 and were all on account. The total cost to manufacture these goods according to their job cost sheets was 720,000 .
(b) Prepare T-accounts for Raw Materials, Work in Process, Finished Goods, Manufacturing Overhead, and Cost of Goods Sold. Post the appropriate parts of your journal entries to these T-accounts. Compute the ending balance in each account. (Don't forget to enter the beginning balances in the inventory accounts.)

A job-order costing system is used by Almeda Products, Inc. At the beginning of the company's fiscal year on April 1, its inventory balances were as follows: The following transactions were carried out throughout the year. [See main answer is attachment]

What is Cost of Goods Sold?

The direct expenses of manufacturing the products that a business sells are referred to as its cost of goods sold (COGS).
The cost of the labor and materials directly employed to make the item are also included in this sum. It doesn't include indirect expenditures like those associated with the sales staff and distribution.
All costs and expenses directly associated with the creation of goods are included in the cost of goods sold (COGS). Indirect expenses like sales and marketing and overhead are not included in COGS. Gross profit and gross margin are determined by deducting COGS from revenues (sales).
Higher COGS results in lower margins. Depending on the accounting principles employed in the computation, COGS will have a different value. Operating expenses (OPEX) contain costs that are not directly related to production, which is how COGS differs from OPEX.

1)Journal Entry

Date Accounts & Description Debit Credit

a) Raw Materials $170,000

Accounts Payable $170,000

b) Work in Process ($180,000 x 80%) $144,000

Manufacturing Overhead ($180,000 x 20%) $36,000

Raw materials $180,000

c) Work in Process $200,000

Manufacturing Overhead $82,000

Salary Expense $90,000

Salaries and Wages Payable $372,000

d) Manufacturing Overhead $65,000

Accounts Payable $65,000

e) Advertising Expense $100,000

Accounts Payable. $100,000

f) Manufacturing Overhead(20000 x 90%) $18,000

Insurance Expense (20000 x 10%) $2,000

Prepaid Insurance $20,000

g) Manufacturing Overhead(180,000 x 85%) $153,000

Depreciation Expense (180000 x 15%) $27,000

Accumulated Depreciation $180,000

h) Work in Process $350,000

Manufacturing Overhead $350,000 $200,000 actual direct labor cost × 175%

i) Finished Goods $700,000

Work in Process $700,000

j) Accounts Receivable $1,000,000

Sales $1,000,000

Cost of Goods Sold $720,000

Finished Goods $720,000

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