Problem 23-6A (Part Level Submission) orgensen Corporation uses standard costs w

Question

Problem 23-6A (Part Level Submission) orgensen Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 1,300 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 $3.90 10.80 15.20 $29.90 3 pounds at $1.30 per pound 1.20 hour at $9.00 per hour 2 hours (variable $4.20 per machine hour; fixed 3.40 per machine hour Normal capacity for the month was 4,490 machine hours. During January, the following transactions applicable to Job No. 12 occurred 1. Purchased 4,160 pounds of raw materials on account at $1.35 per pound 2. Requisitioned 4,160 pounds of raw materials for Job No. 12 3. Incurred 1,612 hours of direct labor at a rate of $8.90 per hour. 4. Worked 1,612 hours of direct labor on Job No. 12 5. Incurred manufacturing overhead on account $21,850 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 $117,000

Explanation / Answer

Journal

No. Account Name Debit Credit 1. Raw material inventory (4160 x $1.35) $5616 Accounts payable $5616 (To record purchase of raw material inventory) 2. Work in process inventory 5616 Raw material inventory 5616 (To record requisition of raw material to Job No. 12) 3. Factory payroll (1612 x $8.90) 14347 Cash 14347 (To record direct labor cost incurred) 4. Work in process inventory 14347 Factory payroll 14347 (To record direct labor on Job No. 12) 5. Manufacturing overhead 21850 Accounts payable 21850 (To record manufacturing overhead incurred) 6. Work in process inventory (1612 x $15.20) 24502 Manufacturing overhead 24502 (To record application of manufacturing overhead) 7. Finished goods inventory 44465 Work in process inventory 44465 (To record completion of Job No. 12) 8. Accounts receivable 117000 Sales 117000 (To record sales) 9. Cost of goods sold 44465 Finished goods inventory 44465 (To record cost of goods sold)

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