Standard unit cost; variance analysis; journal entries} 1,000 units were started and finished. Case 1: All prices

Question:

Standard unit cost; variance analysis; journal entries}

1,000 units were started and finished.

Case 1: All prices and quantities are standard, except for the labor rate, which is \(\$ 10.20\) per hour.

Case 2: All prices and quantities are standard with the exception of labor hours, which totaled 900 .

The standard operating capacity of Nogales Manufacturing Co. is 1,000 units. A detailed study of the manufacturing data relating to the production of one product revealed the following:
1. Two pounds of materials are needed to produce one unit.
2. Standard unit cost of materials is \(\$ 8\) per pound.

3. It takes one hour of labor to produce one unit.
4. Standard labor rate is \(\$ 10\) per hour.
5. Standard overhead for this volume is \(\$ 4,000\).

{Each case in E8-1 through E8-5 requires the following:}

a. Set up a standard cost summary showing the standard unit cost.

b. Analyze the variances for materials and labor.

c. Make journal entries to record the transfer to Work in Process of:

1. materials costs;

2. labor costs;

3. overhead costs.

When making these entries, include the variances.

d. Prepare the journal entry to record the transfer of costs to the finished goods account.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Principles Of Cost Accounting

ISBN: 9780324374179

14th Edition

Authors: Edward J. Vanderbeck

Question Posted: