Howard, Inc. developed the following standards for 2013:

The company planned to produce 120,000 units of product and work at the 120,000 direct labor level of activity in 2013. The company uses a standard cost accounting system which records standard costs in the accounts and recognizes variances in the accounts at the earliest opportunity. During 2013, 116,000 actual units of product were produced.
Instructions
Prepare the journal entries to record the following transactions for Howard, Inc. during 2013.
(a) Purchased 588,000 pounds of raw materials for $4.90 per pound on account.
(b) Actual direct labor payroll amounted to $2,108,000 for 114,000 actual direct labor hours worked. Factory labor cost is to be recorded and distributed to production.
(c) Direct materials issued for production amounted to 588,000 pounds which actually cost $4.90 per pound.
(d) Actual manufacturing overhead costs incurred were $1,152,000 in 2013.
(e) Manufacturing overhead was applied when the 116,000 units were completed.
(f) Transferred the 116,000 completed units to finished goods.

Transcribed Image Text:

Howard, Inc. Standard Cost Card Cost Elements Standard Quantity Standard Price Standard Cost Direct materials Direct labor Manufacturing overhead 5 pounds 1 hour 1 hour $25 18 10 $18 $10 $53