twill machinery orders 10 000 of sheet metal which arrives and is stored in the ware 635712

Twill Machinery orders $10,000 of sheet metal, which arrives and is stored in the warehouse. Twill records this transaction with the following entry:

Twill’s production scheduling staff creates job number 1200, which is designated to accumulate the costs associated with a laying press for an antique book bindery. The production scheduling staff authorizes the issuance of a pick list to the warehouse, which is used to pick items from stock for the construction of job 1200. The pick list includes the following items:

Twill uses the following entry to record the transfer of raw materials to work in process for job 1200. Note that only a portion of the sheet metal is moved to work in process; the rest of the purchased amount remains in the warehouse, to be used on some other job.

During production of the laying press, Twill experiences $300 of abnormal scrap, which it charges directly to the cost of goods sold (not to Job 1200), on the grounds that it must recognize the expense at once. The entry is:

At the end of the month, $5,000 of normal scrap costs have accumulated in the waste overhead cost pool, which accumulates the costs of normal scrap and spoilage (see the Waste Accounting chapter). The cost accountant determines that 10% of this amount, or $500, should be allocated to Job 1200. The entry is:

Twill completes work on the laying press and shifts all related material costs to the finished goods inventory account. The entry is:

Please note that these entries do not yet include labor costs or an allocation for manufacturing overhead; these topics are addressed in the following sections.