Jorgensen Corporation uses standard costs with its job order cost accounting sys
ID: 2525018 • 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 Direct materials Direct labor Overhead Standard cost per unit Normal capacity for the month was 4,470 machine hours. During January, the following transactions applicable to Job No. 12 3 pounds at $1.10 per pound 1.70 hour at $8.00 per hour 2 hours (variable $4.40 per machine hour; fixed $2.70 per machine hour) $3.30 13.60 14.20 $31.10 occurred Purchased 6,080 pounds of raw materials on account at $1.18 per pound. Requisitioned 6,080 pounds of raw materials for Job No. 12. Incurred 3,306 hours of direct labor at a rate of $7.95 per hour. Worked 3,306 hours of direct labor on Job No. 12. Incurred manufacturing overhead on account $29,060. 1. 2. 4. 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 $171,000.Explanation / Answer
Journal Entries (Amounts in $)
No. Account Titles and Explanation Debit Credit 1. Raw Materials Inventory (6,080 pounds*$1.10 per pound) 6,688.00 Materials Price Variance ($7,174.40 - $6,688) 486.40 Accounts Payable (6,080 pounds*$1.18 per pound) 7,174.40 2. Work in Process Inventory (1,900 units*3 pounds*$1.10) 6,270.00 Material Quantity Variance ($6,688 - $6,270) 418.00 Raw Materials Inventory (6,080 pounds*$1.10 per pound) 6,688.00 3. Factory Labor (3,306 hrs*$8.00 per hour) 26,448.00 Labor Rate Variance ($26,448 - $26,282.70) 165.30 Factory Wages Payable (3,306 hrs*$7.95 per hour) 26,282.70 4. Work in Process Inventory (1,900 units*1.70 hrs*$8) 25,840.00 Labor Quantity Variance ($26,448 - $25,840) 608.00 Factory Labor (3,306 hrs*$8.00 per hour) 26,448.00 5. Manufacturing Overhead 29,060 Accounts Payable 29,060 6. Work in Process Inventory [(1,900 units*2 hrs*$4.40)+(4,470*$2.70)] 28,789 Manufacturing Overhead 28,789 7. Finished Goods Inventory ($6,270+$25,840+$28,789) 60,899 Work in Process Inventory 60,899 8. Accounts Receivable 171,000 Sales 171,000 (To record sales) Cost of Goods Sold 60,899 Finished Goods Inventory 60,899 (To record cost of goods sold)Related Questions
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