Jorgensen Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 2,000 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 1. Purchased 6,400 pounds of raw materials on account at $1.18 per pound. 2. Requisitioned 6,400 pounds of raw materials for Job No. 12. Incurred 3,480 hours of direct labor at a rate of $7.95 per hour. Worked 3,480 hours of direct labor on Job No. 12. 3. 4. Normal capacity for the month was 4,470 machine hours. During January, the following transactions applicable to Job No. 12 occurred. 5. 3 pounds at $1.10 per pound 1.70 hour at $8.00 per hour 2 hours (variable $4.40 per machine hour; fixed $2.70 per machine hour) 6. 7. 8. # # Incurred manufacturing overhead on account $30,480. Applied overhead to Job No. 12 on basis of standard machine hours allowed. Completed Job No. 12. Billed customer for Job No. 12 at a selling price of $180,000. # Prepare the January 2020 income statement for management. Assume selling and administrative expenses were $2,100. JORGENSEN CORPORATION Income Statement # : $3.30 13.60 # 14.20 : $31.10 #
Jorgensen Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 2,000 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 1. Purchased 6,400 pounds of raw materials on account at $1.18 per pound. 2. Requisitioned 6,400 pounds of raw materials for Job No. 12. Incurred 3,480 hours of direct labor at a rate of $7.95 per hour. Worked 3,480 hours of direct labor on Job No. 12. 3. 4. Normal capacity for the month was 4,470 machine hours. During January, the following transactions applicable to Job No. 12 occurred. 5. 3 pounds at $1.10 per pound 1.70 hour at $8.00 per hour 2 hours (variable $4.40 per machine hour; fixed $2.70 per machine hour) 6. 7. 8. # # Incurred manufacturing overhead on account $30,480. Applied overhead to Job No. 12 on basis of standard machine hours allowed. Completed Job No. 12. Billed customer for Job No. 12 at a selling price of $180,000. # Prepare the January 2020 income statement for management. Assume selling and administrative expenses were $2,100. JORGENSEN CORPORATION Income Statement # : $3.30 13.60 # 14.20 : $31.10 #
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Jorgensen Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for
2,000 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
1.
2.
3.
Normal capacity for the month was 4,470 machine hours. During January, the following transactions applicable to Job No.
12 occurred.
4.
5.
6.
7.
3 pounds at $1.10 per pound
1.70 hour at $8.00 per hour
2 hours (variable $4.40 per machine hour; fixed $2.70
per machine hour)
8.
Purchased 6,400 pounds of raw materials on account at $1.18 per pound.
Requisitioned 6,400 pounds of raw materials for Job No. 12.
Incurred 3,480 hours of direct labor at a rate of $7.95 per hour.
Worked 3,480 hours of direct labor on Job No. 12.
#
#
Incurred manufacturing overhead on account $30,480.
Applied overhead to Job No. 12 on basis of standard machine hours allowed.
Completed Job No. 12.
Billed customer for Job No. 12 at a selling price of $180,000.
#
#
Prepare the January 2020 income statement for management. Assume selling and administrative expenses were $2,100.
JORGENSEN CORPORATION
Income Statement
#
#
$3.30
13.60
+
14.20
+
#
$31.10
#
+
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