[Solved] Journal Entries, T-Accounts, Cost of Goods Manufactured and Sold During
Journal Entries, T-Accounts, Cost of Goods Manufactured and Sold During May, the following transactions were completed and reported by Jerico Company: a. Materials purchased on account, $60,100. b. Materials issued to production to fill job-order requisitions: direct materials, $50,000; indirect materials, $8,800. c. Payroll for the month: direct labor, $75,000; indirect labor, $36,000; administrative, $28,000; sales, $19,000. d. Depreciation on factory plant and equipment, $10,400. e. Property taxes on the factory accrued during the month, $1,450. f. Insurance on the factory expired with a credit to the prepaid insurance account, $6,200. g. Factory utilities, $5,500. h. Advertising paid with cash, $7,900. i. Depreciation on office equipment, $800; on sales vehicles, $1,650. j. Legal fees incurred but not yet paid for preparation of lease agreements, $750. k. Overhead is charged to production at a rate of $18 per direct labor hour. Records show 4,000 direct labor hours were worked during the month. l. Cost of jobs completed during the month, $160,000. The company also reported the following beginning balances in its inventory accounts: Required: 1. Prepare journal entries to record the transactions occurring in May. 2. Prepare T-accounts for Materials Inventory, Overhead Control, Work-in-Process Inventory, and Finished Goods Inventory. Post all relevant entries to these accounts. 3. Prepare a statement of cost of goods manufactured. 4. If the overhead variance is all allocated to cost of goods sold, by how much will cost of goods sold decrease or increase?