Journal Entries, T-Accounts, Cost of Goods Manufactured and Sold

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

Required:

1. Prepare journal entries to record the transactions occurring in May. For a compound transaction, if an amount box does not require an entry, leave it blank.

a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.

2. Prepare T-accounts for Materials Inventory, Overhead Control, Work-in-Process Inventory, and Finished Goods Inventory. Post the entries to the T-account in the same order in which they were journalized.

Materials Inventory
Balance

Work in Process Inventory
Balance

Finished Goods Inventory
Balance

Overhead Control
		Balance

3. Prepare a statement of cost of goods manufactured.

Jerico Company
Statement of Cost of Goods Manufactured
For the Month Ended May 31, 20XX
		$
Overhead:
	$
	$
Manufacturing costs added		$
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? by $

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