Haslett Corporation uses standard costs with its job order cost accounting syste
ID: 2482279 • Letter: H
Question
Haslett Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 1,300 units of Product B was received. The standard cost of one unit of Product B is as follows.
Direct Materials 2 pounds at 1.50 per poud $3.00
Direcr Labor 2.00 hour at $9 per hour 18.00
Overhead 2 hours (variable $4.00 per machine 14.00
hour; fixed $3.00 per machine hour)
Standard Cost per unit $35.00
Normal capacity for the month was 4,160 machine hours. During January, the following transactions applicable to Job No. 12 occurred.
Billed customer for Job No. 12 at a selling price of $117,000.
Journalize the transactions. PLEASE SHOW WORK IF POSSIBLE, thank you
1. Purchased 3,107 pounds of raw materials on account at $1.57 per pound. 2. Requisitioned 3,107 pounds of raw materials for Job No. 12. 3. Incurred 2,704 hours of direct labor at a rate of $8.90 per hour. 4. Worked 2,704 hours of direct labor on Job No. 12. 5. Incurred manufacturing overhead on account $34,890. 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 $117,000.
Explanation / Answer
If rounded off date Accounts Title Dr Cr Dr Cr 1 Raw Material Inventory (3107*1.5) 4660.50 4661 Material Price Variance 3107*(1.57-1.5) 217.5 217 Accounts Payable (3107*1.57) 4878 4878 (raw material purchased on account) 2 Work In process (1300*2*1.5) 3900 3900 Material Quantity Variance 1.5*(3107-2600) 760.5 761 Raw Material Inventory 4660.5 4661 (Being raw material requsitioned) 3 Factory Labor (2704*9) 24336 24336 Labor Price Variance 2704*(8.9-9) 270.4 270 Wages Payble (2704*8.9) 24065.6 24066 4 Work In process (1300*2*9) 23400.00 Labor Efficiency variance 9*(2704-2600) 936 Factory Labor 24336.00 (being direct labour worked on job) 5 Manufacturing Overhead (4160*7) 29120 Overhead Spending Variance 34890-(4160*7) 5770 Accounts Payable 34890 (Being actual manufacturing overheads incurred on account) 6 Work In process (1300units*2hrs*$7) 18200 Overhead Efficiency Variance 7*(4160-2600) 10920 Manufacturing Overhead 29120 (Being manufacturing overhead applied on the basis of standard hours allowed) 7 Finished Goods (1300*35) 45500.0 Work In process (3900+23400+18200) 45500.0 (Completed job) 8 Accounts receivable 117000 Sales 117000 (being sales on account) Cost of Good Sold 45500.0 Finished Goods 45500.0
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