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making journal entries assume that during the month of april the production report o 729525

Making journal entries

Assume that during the month of April the production report of Austin Adhesives, Inc., in E8 10 revealed the following information:

Units produced during the month

21,000

Direct labor hours for the month

41,000

Materials purchased (in pounds)

130,000

Materials used (in pounds)

125,000

Labor rate per hour

$10.04

Materials cost per pound

$1.98

Make journal entries to charge materials (use the materials purchase price variance) and labor to Work in Process. (Remember to retrieve the standard costs from E8 10 before solving this exercise.)

E8 10

Preparing a standard cost summary and making journal entries:

the normal capacity of Austin 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 $10.00 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.

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