Jorgensen Corporation uses standard costs with its job order cost accounting sys
ID: 2484517 • Letter: J
Question
Jorgensen Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 1,900 units of Product B was received. The standard cost of one unit of Product B is as follows. Normal capacity for the month was 4,390 machine hours. During January, the following transactions applicable to Job No. 12 occurred. 1. Purchased 6,460 pounds of raw materials on account at $1.35 per pound. 2. Requisitioned 6,460 pounds of raw materials for Job No. 12. 3. Incurred 2,945 hours of direct labor at a rate of $7.95 per hour. 4. Worked 2,945 hours of direct labor on Job No. 12. 5. Incurred manufacturing overhead on account $27,100. 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 $180,500.Explanation / Answer
Job NO :12 Journal Entry No Description Debit $ Credit $ 1 Raw material Inventory 8721 Accounts Payable 8721 (being Purchased 6,460 pounds of raw maTerials on accounT aT $1.35 per pound.) 2 Work In process inventory 8721 Raw material Inventory 8721 ( Being Requisitoned 6,460 pounds of raw maTerials for Job No. 12.) 3 Direct Labur Expenses 23412.75 To wages payable to labour 23412.75 (Being entry for Incurred 2945 hours of direcT labor aT a raTe of $7.95 per hour 4 Work In process inventory 23412.75 Direct Labur Expenses 23412.75 (Being entry for worked 2945 hours of direcT labor aT a raTe of $7.95 per hour 5 Manufacturing Overhead 27100 To Accounts Payable 27100 (Being entry for Incurred manufacTuring overhead on accounT $27,100.) 6 Work In process inventory 27100 Manufacturing Overhead 27100 (Being entry for applied overhead To Job No. 12 on basis of sTandard machine hour allowed.) 7 Finished Goods Inventory 59233.75 Work In process inventory 59233.75 ( being entry for CompleTed Job No. 12.) 8 Accounts Recevable 180500 to Sales Revenue 180500 ( Being Entry for Billed cusTomer for Job No. 12 aT a selling price of $180,500)
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