Finley Foundry Corp. manufactures iron castings to order for other manufacturing companies. A standard costing system is used in which raw materials inventories are carried at actual costs. The following standards have been established for one part, the \(3_{1 / 2} "\) bushing.

During a recent month Job. No. 120 was completed which consisted of 600 such bushings. A total of 1,950 pounds of iron were used, which had been purchased at a cost of \(\$ .48\) per pound. Job. No. 120 required 4 workers a total of 55 hours each to complete. They were each paid \(\$ 6.10\) per hour. Factory overhead is allocated to products at a rate of \(150 \%\) of actual direct labor cost.
Show the following:

(a) The actual (historical) unit cost for Job No. 120,

(b) All materials and labor variances for Job No. 120,

(c) Entries recording:
(1) issue of material, (2) direct labor, (3) application of overhead, (4) transfer of Job No. 120 to finished goods inventory.
Standards and Process Costing

Transcribed Image Text:

Materials, 3 lb. @ $.50.. Labor, 1/3 hr. $6.00... $1.50 2.00 Standard prime unit cost...... .$3.50