Question

P23-6B Journalize and post standard cost entries, and prepare income statement
Frio Company uses standard costs with its job order cost accounting system.
In January, an order (Job No. 84) was received for 5,500 units of Product D . The standard
cost of one unit of Product D is as follows.
	Direct materials		1.5 pounds at $4.00 per pound				$6.00
	Direct labor		1 hour at $9.00 per hour				9.00
	Overhead		1 hour (variable $7.40; fixed $8.00				15.40
	Standard cost per unit						$30.40
Overhead is applied on the basis of direct labor hours. Normal capacity for the month
of January was 6,000 direct labor hours. During January, the following transactions
applicable to Job No, 48 occurred.
1. Purchased 8,100 pounds of raw materials on account at $3.70 per pound.
2. Requisitioned 8,100 pounds of raw materials for production.
3. Incurred 5,200 hours of direct labor at a rate of $9.20 per hour.
4. Worked 5,200 hours of direct labor on Job No.84.
5. Incurred $87,500 of manufacturing overhead on account.
6. Applied overhead to Job No. 84 on basis of direct labor hours.
7. Transferred Job NO. 84 to finished goods.
8. Billed customer for Job No. 84 at a selling price of $270,000.
Instructions
(a) Journalize the transactions.
(b) Post to the job order cost accounts.
(c ) Prepare the entry to recognize the total overhead variance.
(d) Prepare the January 2014 income statement for management. Assume selling and
administrative expenses were $60,000.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
(a)(1)	Account				Value
		Account				Value
		Account				Value
(a)(2)	Account				Value
		Account				Value
		Account				Value
(a)(3)	Account				Value
	Account				Value
		Account				Value
(a)(4)	Account				Value
		Account				Value
		Account				Value
(a)(5)	Account				Value
		Account				Value
(a)(6)	Account				Value
		Account				Value
(a)(7)	Account				Value
		Account				Value
(a)(8)	Account				Value
		Account				Value
	Account				Value
		Account				Value
(b)	Raw Materials Inventory			Materials Price Variance			Work in Process Inventory
	Value	Value			Value		Value	Value
							Value
							Value
	Factory Labor			Materials Quantity Variance			Finished Goods Inventory
	Value	Value			Value		Value	Value
	Manufacturing Overhead			Labor Price Variance			Cost of Goods Sold
	Value	Value		Value			Value
				Labor Quantity Variance
					Value
(c )	Account				Value
		Account				Value
(d)	FRIO COMPANY
	Income Statement
	For the Month Ended January 31, 2014
	Sales revenue				Value
	Cost of goods sold (at standard)				Value
	Gross profit (at standard)				Value
	Variances
	Material price			Value
	Materials quantity			Value
	Labor price			Value
	Labor quantity			Value
	Overhead			Value
	Total variance - favorable				Value
	Gross profit (actual)				Value
	Selling and administrative expenses				Value
	Net income				Value