The following information pertains to production operations of Abernathy Corporation for May:
(a) Inventories:
Work in process: Beginning, 3,000 units, all materials, 1/3 converted; ending, 2,000 units, all materials, 3/4 converted; no spoilage.
Finished goods: 200 units in beginning inventory and 100 units in ending inventory.
(b) Standard and actual costs:
Materials: Standard quantity, 6 units of material per unit of product at $.50 per unit of material; 30,000 units of material were purchased on account for a total cost of $16,000 (the price variance is recorded at the date of purchase); 24,500 units of material were requisitioned from the storeroom.
LaborStandard per unit of product, 1/2 hour at $10 per hour; actual labor rate was $10.75 per hour for 2,600 hours.
Factory overhead: Normal capacity, 2,500 labor hours; fixed factory overhead rate, $9 per labor hour; variable factory overhead rate, $3 per labor hour; actual factory overhead was $31,000.
Five thousand units of product were completed during the period, and 5,100 were sold on account for $22 each.
Required:
Prepare the journal entries to record the cost accounting cycle transactions, using standard costing. Record two variances for each element of cost.