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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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