AllStar

Company uses a standard cost system and reports the following information for 2024:

Data table

Standards:

3 yards of cloth per unit at $1.15 per yard

2 direct labor hours per unit at $17.50 per hour

Overhead allocated at $4.00 per direct labor hour

Actual:

2,700 yards of cloth were purchased at $1.20 per yard

Employees worked 1,300 hours and were paid $17.00 per hour

Actual variable overhead was $1,600

Actual fixed overhead was $4,400

Question content area top right

Part 1

AllStar Company reported the following variances:

Data table

Direct materials cost variance	$135 U
Direct materials efficiency variance	345 F
Direct labor cost variance	650 F
Direct labor efficiency variance	12,250 F
Variable overhead cost variance	800 U
Variable overhead efficiency variance	800 F
Fixed overhead cost variance	800 U
Fixed overhead volume variance	2,800 F

AllStar produced 1,000 units of finished product in 2024.

Requirements

Record the journal entries for direct materials, direct labor, variable overhead, and fixed overhead, assuming all expenditures were on account and there were no beginning or ending balances in the inventory accounts (all materials purchased were used in production, and all goods produced were sold). Record the journal entries for the transfer to Finished Goods Inventory and Cost of Goods Sold (omit the journal entry for Sales Revenue). Record the journal entry to adjust the Manufacturing Overhead account. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)

Question content area bottom

Part 1

Begin by journalizing the purchase of direct materials on account, including the related variance. (Prepare a single compound journal entry.)

Date			Accounts and Explanation	Debit	Credit