Question

Jorgensen Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 1,000 units of Product B was received. The standard cost of one unit of Product B is as follows. 3 pounds at $1.00 per pound Direct materials $3.00 Direct labor 1.50 hour at $10.00 per hour 15.00 2 hours (variable $4.30 per machine hour; fixed $3.30 per machine hour) Overhead 15.20 $33.20 Standard cost per unit Normal capacity for the month was 4,030 machine hours. During January, the following transactions applicable to Job No. 12 occurred Purchased 3,100 pounds of raw materials on account at $1.06 per pound. 1 Requisitioned 3,100 pounds of raw materials for Job No. 12 2. Incurred 1,580 hours of direct labor at a rate of $9.90 per hour 4. Worked 1,580 hours of direct labor on Job No. 12. Incurred manufacturing overhead on account $16,670. 5. Applied overhead to Job No. 12 on basis of standard machine hours allowed 6 7. Completed Job No. 12. 8 Billed customer for Job No. 12 at a selling price of $75,000. 6. Work in Process Inventory 22,800 Manufacturing Overhead 22,800 7. Finished Goods Inventory 40,800 X 40,800 Work in Process Inventory 8. Accounts Receivable 75,000 Sales Revenue 75,000 (To record sales.) Cost of Goods Sold 40,800 X Finished Goods Inventory 40,800 (To record cost of goods sold.) Raw Materials Inventory 186 3,100 (1) (2) 3,100 Factory Labor 15,800 (3) (4) 15,800 Manufacturing Overhead (5) 16,670 (6) 22,800 Materials Price Variance (1) 186 Materials Quantity Variance 100 (2) 수 Labor Price Variance (3) 수 158 Labor Quantity Variance (4) 800 Work in Process Inventory 3,000||| (7) 40,800 (2) 15,000 (4) (6) 22,800 Finished Goods Inventory (8) (7) 40,800 40,800 Cost of Goods Sold (8) 40,800 Prepare the entry to recognize the total overhead variance. (Credit account titles are au Overhead Variance Account Titles al. Laprunatvn Debit Credit Overhead Variance 7500 Manufacturing Overhead 7500 Prepare the January 2020 income statement for management. Assume selling and administrative expenses were $3,500 JORGENSEN CORPORATION Income Statement For the Month Ended January 31, 2020 Sales Revenue 75,000 Cost of Goods Sold 40,800 Gross Profit (at Standard) 34200 Variances Materials Price Variance Favorable 186 Materials Quantity Variance 100 Favorable Neither favorable nor unfavorable Labor Price Variance (158) Labor Quantity Variance Favorable 800 Favorable Manufacturing Overhead 7500 Unfavorable 8428 Total Variance Gross Profit (Actual) 25772 Selling and Administrative Expenses 3500 22272 Net Income/ (Loss)

Answer 1

trans	Accounts Title	Dr	Cr
6	Work In process inventory	15200
	Manufacturing Overhead		15200
	(1000*2*(4.3+3.3))
7	Finished good inventory	33200
	Work In process inventory		33200
	(3000+15000+15200)
8	Cost of good sold	33200
	Finished good inventory		33200
	Manufacturing overhead
5	16670	6	15200
	Work In process inventory
2	3000	7	33200
4	15000
6	15200
	Finished good inventory
7	33200	8	33200
	Cost of good sold
8	33200
	Accounts Title
		Dr	Cr
	Overhead variance (16670-15200)	1470
	Manufacturing overhead		1470
	Income Statement
	Sales revenue			$75,000
	Cost of good dold			33200
	Gross profit standard			$41,800
	Material Price varaince	186	U
	Material quantity variance	100	U
	labor rate varianvce	-158	F
	Labor qty variance	800	U
	Overhead varaince	1470	U
	Total varaince		U	2398
	Gross profit actual			$39,402
	Selling & administrative expenses			3500
	Net Income			$35,902
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