5 26 During May, the following transactions were completed and reported by Jerico Company Materials purchased on account, $60,100 Materials issued to production to fill job order requisitions direct materials, $50,000 indirect materials, $8,800 Payroll for the month direct labor, $75,000 indirect labor, $36,000 administrative, $28,000 sales, $19,000 Depreciation on factory plant and equipment, $10,400 Property taxes on the factory accrued during the month, $1,450 Insurance on the factory expired with a credit to the prepaid insurance account, $6,200 Factory utilities, $5,500 Advertising paid with cash, $7,900 Depreciation on office equipment, $800 on sales vehicles, $1,650 Legal fees incurred but not yet paid for preparation of lease agreements, $750 Overhead is charged to production at a rate of $18 per direct labor hour Records show 4,000 direct labor hours were worked during the month Cost of jobs completed during the month, $160,000 The company also reported the following beginning balances in its inventory accounts Materials Inventory $ 7,500 Work in Process Inventory 37,000 Finished Goods Inventory 50,000 Instructions 1) Prepare the journal entries to record the transactions occurring in May 2) Prepare T accounts for Material Inventory, Overhead Control, Work in Process Inventory, and Finished Goods Inventory Post all relevant entries to these accounts 3) Prepare a statement of Cost of Goods Manufactured 4) If the overhead variance is all allocated to Cost of Goods Sold, by how much will Cost of Goods Sold decrease or increase

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#5-26 During May, the following transactions were completed and reported by Jerico Company: Materials purchased on account, $60,100. Materials issued to production to fill job-order

#5-26

During May, the following transactions were completed and reported by Jerico Company:

Materials purchased on account, $60,100.
Materials issued to production to fill job-order requisitions: direct materials, $50,000; indirect materials, $8,800.
Payroll for the month: direct labor, $75,000; indirect labor, $36,000; administrative, $28,000; sales, $19,000.
Depreciation on factory plant and equipment, $10,400.
Property taxes on the factory accrued during the month, $1,450.
Insurance on the factory expired with a credit to the prepaid insurance account, $6,200.
Factory utilities, $5,500.
Advertising paid with cash, $7,900.
Depreciation on office equipment, $800; on sales vehicles, $1,650.
Legal fees incurred but not yet paid for preparation of lease agreements, $750.
Overhead is charged to production at a rate of $18 per direct labor hour. Records show 4,000 direct labor hours were worked during the month.
Cost of jobs completed during the month, $160,000.

The company also reported the following beginning balances in its inventory accounts:

Materials Inventory	$ 7,500
Work-in-Process Inventory	37,000
Finished Goods Inventory	50,000

Instructions:

1) Prepare the journal entries to record the transactions occurring in May.

2) Prepare T-accounts for Material Inventory, Overhead Control, Work-in-Process Inventory, and Finished Goods Inventory. Post all relevant entries to these accounts.

3) Prepare a statement of Cost of Goods Manufactured.

4) If the overhead variance is all allocated to Cost of Goods Sold, by how much will Cost of Goods Sold decrease or increase?