Final answer:
The subject of the question is Yellen Furnishings' job order cost system used to allocate materials costs to specific manufacturing jobs. It involves tracking direct materials from the materials ledger as part of job cost estimation.
Step-by-step explanation:
The question concerns Yellen Furnishings, a company that manufactures designer furniture. Yellen Furnishings operates a job order cost system, which is a method of costing that is used in manufacturing and service sectors where work is undertaken to the customer's specific requirements. On June 1, balances from the materials ledger are given, typically indicating the direct materials available at the start of the period. These materials are used in the production process and would include raw materials such as wood, fabric, and hardware that will be allocated to specific jobs as they are used.
In a job order cost system, costs are accumulated for each job separately. The materials ledger is part of the documentation that tracks the cost of materials, labor, and overhead applied to each job, uniquely identifying the expenditures associated with each piece of manufactured furniture. This system ensures accurate cost tracking and is crucial in setting the sales price and for analyzing the profitability of each job.