Jenna’s Jewelry uses a job order costing system. Jenna had the following transac

Question

Jenna’s Jewelry uses a job order costing system. Jenna had the following transactions in April:

4-1: Jennifer ordered a custom gold necklace

4-2: The factory requests 12 ounces of hold from the warehouse. The gold cost $1,000 per ounce

4-3 — 4-9: The factory works on the necklace and has the following charges: Direct Labor: 50 hours at $50 per hour

Manufacturing overhead is allocated based on a predetermined overhead rate. The rate is $20 per direct labor hour

4-10: The factory finishes the necklace and sends it to the showroom

4-12: Jennifer picks up the necklace and pays $40,000 in cash

Required: Prepare the appropriate journal entries and post them to the ledger.

Explanation / Answer

Posting to ledger:

Journal Entries: 1 Work in Process a/c (1000*12)                                   Dr 12000    Inventory a/c 12000 [Being material issued for manufacture] 2 Wages a/c                                                                          Dr 2500    To Wages Payable a/c 2500 2 Work in Process a/c                                                         Dr 2500    To wages a/c 2500 3 Work in Process a/c                                                          Dr 1000    To Manufacturing Overhead (50*20) 1000 4 Finished Goods a/c                                                          Dr 15500    To Work in Process 15500 5 Cost of Goods Sold Dr 15500    To Finished Goods 15500 6 Cash a/c Dr 40000    To Sales 40000

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