Standard Unit Cost and Journal Entries

The normal capacity of Algonquin Adhesives Inc. is 40,000 direct labor hours and 20,000 units per month. A finished unit requires 6 lb 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 (all variable) 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 lb of materials at a cost of $2.04 per pound.

Prepare a standard cost summary showing the standard unit cost.

Standard Cost Summary
Materials		$
Labor
Factory Overhead
Standard Cost Per Unit		$

2. Make journal entries to charge materials and labor to Work in Process. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".