Preparing a standard cost summary and making journal entries LO_2,3,4 The normal capacity of Governor Electric Inc. is 40,000 direct labor hours and 20,000 units per month. A finished unit requires 6 pounds of materials at an estimated cost of \($2\) per pound. The estimated cost of labor is \($10.00\) per hour. The plant estimates that overhead for a month will be $40,000.

During the month of March, the plant totaled 34,800 direct labor hours at an average rate of \($9.50\) an hour. The plant produced 18,000 units, using 105,000 pounds of materials at a cost of \($2.04\) per pound.

1.Prepare a standard cost summary showing the standard unit cost.
2. Make journal entries to charge materials and labor to Work in Process.
Indicate variances as favorable or unfavorable.