Preparing a standard cost summary and making journal entries} The normal capacity of Albany Adhesives, 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 \(\$ 10\) 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.