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P23-6A Journalize and post standard cost entries, and prepare income statement Jorgenson Corporation uses standard costs with its job order cost accounting system. In January,

P23-6A Journalize and post standard cost entries, and prepare income statement
Jorgenson 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 3 pounds at $1.00 per pound $3.00
Direct labor 1 hour at $8.00 per hour 8.00
Overhead 2 hours (variable $4.00 per machine hour;
fixed $2.25 per machine hour) 12.50
Standard cost per unit $23.50
Normal capacity for the month was 4,200 machine hours. During January, the following
transactions applicable to Job No. 12 occurred.
1. Purchased 6,200 pounds of raw materials on account at $1.05 per pound.
2. Requisitioned 6,200 pounds of raw materials for Job No. 12.
3. Incurred 2,000 hours of direct labor at a rate of $7.80 per hour.
4. Worked 2,000 hours of direct labor on Job No.12.
5. Incurred manufacturing overhead on account $25,000.
6. Applied overhead to Job No. 12 on basis of standard machine hour allowed.
7. Completed Job No. 12.
8. Billed customer for Job No. 12 at a selling price of $65,000.
Instructions
(a) Journalize the transactions.
(b) Post to the job order cost accounts.
(c ) Prepare the entry to recognize the total overhead variance.
(d) Prepare the January 2014 income statement for management. Assume selling and
administrative expenses were $2,000.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
(a)(1) Account Value
Account Value
Account Value
(a)(2) Account Value
Account Value
Account Value
(a)(3) Account Value
Account Value
Account Value
(a)(4) Account Value
Account Value
Account Value
(a)(5) Account Value
Account Value
(a)(6) Account Value
Account Value
(a)(7) Account Value
Account Value
(a)(8) Account Value
Account Value
Account Value
Account Value
(b) Raw Materials Inventory Materials Price Variance Work in Process Inventory
Value Value Value Value Value
Value
Value
Factory Labor Materials Quantity Variance Finished Goods Inventory
Value Value Value Value Value
Manufacturing Overhead Labor Price Variance Cost of Goods Sold
Value Value Value Value
Labor Quantity Variance
Value
(c ) Account Value
Account Value
(d) JORGENSEN CORPORATION
Income Statement
For the Month Ended January 31, 2014
Sales revenue Value
Cost of goods sold (at standard) Value
Gross profit (at standard) Value
Variances
Material price Value
Materials quantity Value
Labor price Value
Labor quantity Value
Overhead Value
Total variance - favorable Value
Gross profit (actual) Value
Selling and administrative expenses Value
Net income Value

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