Please solve this problem Problem 23-6A (Part Level Submission) Jorgensen Corpor
ID: 2559530 • Letter: P
Question
Please solve this problem
Problem 23-6A (Part Level Submission) Jorgensen Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 1,200 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 3 pounds at $1.00 per pound 1.20 hour at $8.00 per hour 2 hours (variable $4.10 per machine hour; fixed $2.80 per machine 3.00 9.60 13.80 $26.40 hour) Normal capacity for the month was 4,300 machine hours. During January, the following transactions applicable to Job No. 12 occurred. 1. Purchased 3,960 pounds of raw materials on account at $1.06 per pound 2. Requisitioned 3,960 pounds of raw materials for Job No. 12. 3 Incurred 1,536 hours of direct labor at a rate of $7.90 per hour 4. Worked 1,536 hours of direct labor on Job No. 12. 5. Incurred manufacturing overhead on account $18,000 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 $102,000.Explanation / Answer
Answer a. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1 Raw Materials Inventory Dr. 3,960 3,960 Pounds X $1 Material Price Variance Dr. 238 ($1 - $1.06) X 3,960 Pouns To Accounts Payable 4,198 3,960 Pounds X $1.06 2 WIP Inventory Dr. 3,600 3,600 Pounds X $1 Material Quantity Variance Dr. 360 (3,600 pounds - 3,960 Pounds) X $1 To Raw Material Inventory 3,960 3,960 Pounds X $1 3 Factory Labor Dr. 12,288 1,536 hrs X $8 To Labor Price Variance 154 ($8 - $7.90) X 1,536 hrs To Factory Wages Payable 12,134 1,536 hrs X $7.90 4 WIP Inventory Dr. 11,520 1,440 Hrs X $8 Labor Quantity Variance Dr. 768 (1,440 hrs - 1,536 hrs) X $8 To Factory Labor 12,288 1,536 Hours X $8 5 Manufacturing Overhead Dr. 18,000 To Accounts Payable 18,000 6 WIP Inventory Dr. 16,560 (1,200 Units X 2 Mach Hrs) X ($4.10 + $2.80) To Manufacturing Overhead 16,560 (1,200 Units X 2 Mach Hrs) X ($4.10 + $2.80) 7 Finished Goods Inventory Dr. 31,680 1,200 Units X $26.40 To WIP Inventory 31,680 1,200 Units X $26.40 8-a Accounts Receivable Dr. 102,000 To Sales 102,000 8-b Cost of Goods Sold Dr. 31,680 To Finished Gods Inventory 31,680 Answer b. Raw Materials Inventory Factory Labor Manufacturing Overhead 1 3,960 3,960 2 3 12,288 12,288 4 5 18,000 16,560 6 Material Price Variance Material Quantity Variance Labor Price Variance 1 238 2 360 154 3 Labor Quantity Variance WIP Inventory Finished Goods Inventory 4 768 2 3,600 31,680 7 7 31,680 31,680 8-b 4 11,520 6 16,560 Cost of Goods Sold 8-b 31,680