Pharoah Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2022, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $18,000, direct labor $10,800, and manufacturing overhead $14,400. of January 1, Job 49 had been completed at a cost of $81,000 and was part of finished goods inventory. There was a $13,500 balance in the Raw Materials Inventory account on January 1. During the month of January, Pharoah Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold on account during the month for $109,800 and $142,200, respectively. The following additional events occurred during the month. 1. 2. 3. 4. 5. Purchased additional raw materials of $81,000 on account. Incurred factory labor costs of $63,000. Incurred manufacturing overhead costs as follows: depreciation expense on equipment $10,800; and various other manufacturing overhead costs on account $14,400. Assigned direct materials and direct labor to jobs as follows. Job No. 50 51 52 Direct Materials $9,000 35,100 27,000 Direct Labor $4,500 22,500 18,000 Assigned indirect materials of $15,300 and indirect labor of $18,000.
Pharoah Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2022, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $18,000, direct labor $10,800, and manufacturing overhead $14,400. of January 1, Job 49 had been completed at a cost of $81,000 and was part of finished goods inventory. There was a $13,500 balance in the Raw Materials Inventory account on January 1. During the month of January, Pharoah Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold on account during the month for $109,800 and $142,200, respectively. The following additional events occurred during the month. 1. 2. 3. 4. 5. Purchased additional raw materials of $81,000 on account. Incurred factory labor costs of $63,000. Incurred manufacturing overhead costs as follows: depreciation expense on equipment $10,800; and various other manufacturing overhead costs on account $14,400. Assigned direct materials and direct labor to jobs as follows. Job No. 50 51 52 Direct Materials $9,000 35,100 27,000 Direct Labor $4,500 22,500 18,000 Assigned indirect materials of $15,300 and indirect labor of $18,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Prepare the journal entries to record the assignment of (1) raw materials, (2) factory labor, and (3) manufacturing overhead costs
to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). (List all debit entries before credit
entries. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No. Account Titles and Explanation
(1)
(2)
(3)
Work in Process Inventory
Manufacturing Overhead
Raw Materials Inventory
Work in Process Inventory
Manufacturing Overhead
Factory Labor
Work in Process Inventory
Manufacturing Overhead
Debit
85500
10000
18900
29970
Credit
14400
71100
DHEDE
14400
4500
29970
Transcribed Image Text:Pharoah Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1,
2022, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $18,000,
direct labor $10,800, and manufacturing overhead $14,400. As of January 1, Job 49 had been completed at a cost of $81,000 and was
part of finished goods inventory. There was a $13,500 balance in the Raw Materials Inventory account on January 1.
During the month of January, Pharoah Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50
were sold on account during the month for $109,800 and $142,200, respectively. The following additional events occurred during the
month.
1.
2.
3.
4.
5.
Purchased additional raw materials of $81,000 on account.
Incurred factory labor costs of $63,000.
Incurred manufacturing overhead costs as follows: depreciation expense on equipment $10,800; and various other
manufacturing overhead costs on account $14,400.
Assigned direct materials and direct labor to jobs as follows.
Job No.
50
51
52
Direct Materials
$9,000
35,100
27,000
Direct Labor
$4,500
22,500
18,000
Assigned indirect materials of $15,300 and indirect labor of $18,000.
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