Comprehensive Standard Cost Problem: The following information is provided to assist you in evaluating the performance of the manufacturing operations at the Ashwood Company:

Variable overhead is applied on the basis of the direct labor-hours allowed. There were $440 F price and $4,000 F production volume variances for fixed overhead.

Required:

a. Prepare journal entries to show the transactions, using traditional standard, full- absorption costing in as much detail as possible.

b. Use T-accounts to show the flow of costs.

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Units of output produced Standard costs per unit: Direct materials: $1.65 x 5 pounds per unit of output Direct labor: $14.00 per labor-hour x .5 hour per unit Variable overhead: $11.90 per labor-hour x .5 hour per unit Actual costs: Direct materials purchased and used Direct labor Overhead 21,000 $188,700 (102,000 pounds) 140,000 (10,700 hours) 204,000 (61% is variable)