Allocation and Tracing Cost

                     

                          Allocation and Tracing Cost 

Simple form for the cycle of tracing and allocating costs for a certain job:
                                                                                                             

After the job is completed, it will be a finished good which is ready for

Sale & after selling it will go to the part of cost of goods sold.



We will have 3 controlling accounts in general ledger:

1-work in process " still under processing and not yet a finished good"

2-Finished good "a finished good which is ready for sale"

3-Cost of goods sold "a finished good that already sold"