Jacobs Company manufactures a single product and uses a standard costing system. The nature of its product dictates that it be sold in the period it is produced. Thus, no ending work in process or finished goods inventories remain at the end of the period. However, raw materials can be stored and are purchased in bulk when prices are favorable. Per-unit standard product costs are material, $8 (4 pounds); labor, $6 (0.5 hour); and variable overhead, $4 (based on direct labor hours). Budgeted fixed overhead is $54,000. Jacobs accounts for all inventories and cost of goods sold at standard cost and records each variance in a separate account. The following data relate to May when 17,700 finished units were produced. a. Assume Jacobs purchased 69,000 pounds of raw materials on account at $2.20 per pound and used 67,000 pounds in May's production, prepare a journal entry to record the purchase of raw materials and a separate journal entry to record the use of raw materials in production. Record these entries using standard costs and include the appropriate materials variances.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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a. Assume Jacobs purchased 69,000 pounds of raw
materials on account at $2.20 per pound and used
67,000 pounds in May's production, prepare a journal
entry to record the purchase of raw materials and al
separate journal entry to record the use of raw
materials in production. Record these entries using
standard costs and include the appropriate materials
variances.
General Journal
Description
Materials price variance
To record the purchase of direct materials
Materials inventory
To record the use of direct materials
Debit
Transcribed Image Text:a. Assume Jacobs purchased 69,000 pounds of raw materials on account at $2.20 per pound and used 67,000 pounds in May's production, prepare a journal entry to record the purchase of raw materials and al separate journal entry to record the use of raw materials in production. Record these entries using standard costs and include the appropriate materials variances. General Journal Description Materials price variance To record the purchase of direct materials Materials inventory To record the use of direct materials Debit
Variances and Journal Entries
Jacobs Company manufactures a single product and
uses a standard costing system. The nature of its
product dictates that it be sold in the period it is
produced. Thus, no ending work in process or finished
goods inventories remain at the end of the period.
However, raw materials can be stored and are
purchased in bulk when prices are favorable. Per-unit
standard product costs are material, $8 (4 pounds);
labor, $6 (0.5 hour); and variable overhead, $4 (based on
direct labor hours). Budgeted fixed overhead is $54,000.
Jacobs accounts for all inventories and cost of goods
sold at standard cost and records each variance in a
separate account. The following data relate to May
when 17,700 finished units were produced.
a. Assume Jacobs purchased 69,000 pounds of raw
materials on account at $2.20 per pound and used
67,000 pounds in May's production, prepare a journal
entry to record the purchase of raw materials and a
separate journal entry to record the use of raw
materials in production. Record these entries using
standard costs and include the appropriate materials
variances.
Transcribed Image Text:Variances and Journal Entries Jacobs Company manufactures a single product and uses a standard costing system. The nature of its product dictates that it be sold in the period it is produced. Thus, no ending work in process or finished goods inventories remain at the end of the period. However, raw materials can be stored and are purchased in bulk when prices are favorable. Per-unit standard product costs are material, $8 (4 pounds); labor, $6 (0.5 hour); and variable overhead, $4 (based on direct labor hours). Budgeted fixed overhead is $54,000. Jacobs accounts for all inventories and cost of goods sold at standard cost and records each variance in a separate account. The following data relate to May when 17,700 finished units were produced. a. Assume Jacobs purchased 69,000 pounds of raw materials on account at $2.20 per pound and used 67,000 pounds in May's production, prepare a journal entry to record the purchase of raw materials and a separate journal entry to record the use of raw materials in production. Record these entries using standard costs and include the appropriate materials variances.
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