Nickelson Manufacturing Company manufactures a product called Janetech, which has the following standard costs:
Materials6 units at $2 = $12.00
Labor1/4 hr. at 8= 2.00
Variable factory overhead3/4 hr. at 4 = 3.00
Fixed factory overhead (normal capacity is 4,000 hours of
processing time)3/4 hr. at 12 = 9.00
Total standard cost$26.00
The following information pertains to actual production activity for August:
(a) 6,000 equivalent units of Janetech were produced with respect to materials, 5,800 equivalent units with respect to labor, and 5,500 equivalent units with respect to factory overhead.
(b) 33,000 units of materials were purchased on account at a total cost of $64,020. The materials price variance is recorded when the materials are purchased.
(c) 40,000 units of materials were issued to production and used during the period.
(d) Direct labor cost was $12,300 for 1,500 actual hours. Assume the liability has already been recorded, but the cost has not been distributed.
(e) Actual processing required during August totaled 4,300 hours.
(f) Actual factory overhead was $67,250.
(g) 5,200 units were completed and transferred to finished goods inventory during the month.
(h) 5,500 units of Janetech were sold during the month for $40 each.
Required:
Prepare the journal entries to record the information provided, including two variances for each cost element.