Account Titles and Explanation Debit Credit Jorgensen Corporation uses standard

Question

Account Titles and Explanation

Debit

Credit

Jorgensen 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 3 pounds at $1.30 per pound $3.90 Direct labor 1.10 hour at $9.00 per hour 9.90 Overhead 2 hours (variable $4.10 per machine hour; fixed $2.90 per machine hour) 14.00 Standard cost per unit $27.80
Normal capacity for the month was 4,050 machine hours. During January, the following transactions applicable to Job No. 12 occurred.
1. Purchased 4,420 pounds of raw materials on account at $1.34 per pound. 2. Requisitioned 4,420 pounds of raw materials for Job No. 12. 3. Incurred 1,521 hours of direct labor at a rate of $8.95 per hour. 4. Worked 1,521 hours of direct labor on Job No. 12. 5. Incurred manufacturing overhead on account $19,820. 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 $97,500.

Explanation / Answer

Purchases(dr) 5922.80

Labour cost (dr) 13612.95

Overhead cost (dr) 18200

To cost of goods sold(cr) 37735.75

Cost of goods sold(dr) 37735.75

Profit and loss (dr) 59764.25

To sales (cr) 97500

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