Direct materials 2 pounds at $1.00 per pound 2 Direct labor 2.00 hour at $10 per

Question

Direct materials 2 pounds at $1.00 per pound 2 Direct labor 2.00 hour at $10 per hour 20 Overhead 2 hours (variable $4.50 per machine hour; fixed $3.00 per machine hour) 15 Standard cost per unit $37.00 Normal capacity for the month was 4,000 machine hours. During January, the following transactions applicable to Job No. 12 occurred. Purchased 3,195 pounds of raw materials on account at $1.06 per pound. 3195 1.06 Requisitioned 3,195 pounds of raw materials for Job No. 12. 3195 Incurred 3,105 hours of direct labor at a rate of $9.93 per hour. 3105 9.93 Worked 3,105 hours of direct labor on Job No. 12. 3105 Incurred manufacturing overhead on account $24,670. 24670 Applied overhead to Job No. 12 on basis of standard machine hours allowed. Completed Job No. 12. Billed customer for Job No. 12 at a selling price of $120,000. 120000 Problem 23-6A (part level submission) Jorgensen Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 1,500 units of Product B was received. The standard cost of one unit of Product B is as follows Direct materials Direct labor Overhead 2 pounds at $1.00 per pound 2.00 hour at $10 per hour 2 hours (variable 4.50 per machine hour; fixed $3.00 per machine hour) $ 2.00 20.00 15.00 $37.00 Standard cost per unit Normal capacity for the month was 4,000 machine hours. During January, the following transactions applicable to Job No. 12 occurred 1. Purchased 3,195 pounds of raw materials on account at $1.06 per pound 2. Requisitioned 3,195 pounds of raw materials for Job No. 12 3. Incurred 3,105 hours of direct labor at a rate of $9.93 per hour 4. Worked 3,105 hours of direct labor on Job No. 12 5. Incurred manufacturing overhead on account $24,670 6. Applied overhead to Job No. 12 on basis of standard machine hours allowed 7. Completed Job No. 12 8. Billed customer for Job No. 12 at a selling price of $120,000

Explanation / Answer

Jorgensen Corporation Journal Entry Account Title Dr $ Cr $      1 Raw Materials Inventory                      3,387 Accounts Payable                       3,387      2 Raw Materials Inventory                       3,387 WIP (Job no 12)                      3,387 (Raw material issue to Job 12 @1.06/lb)      3 Wages Expense                   30,833 Wages Payable                     30,833      4 WIP (Job no 12)                   30,833 Wages Expense                     30,833 ( Wages charged to Job 12 @9.93/hr)      5 Manufacturing Overhead                   24,670 Accounts Payable                     24,670      6 WIP (Job no 12)                   22,500 Manufacturing Overhead                     22,500 ( Overhead applied @$15 per unit for 1500 units)      7 WIP (Job no 12)                     56,719 Finished Goods Inventory                   56,719      8 Sales revenue                  120,000 Accounts Receivable                 120,000 Finished Goods Inventory                     56,719 Cost of Goods Sold                   56,719

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