Deporte Company produces single-colored t-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following standards for changeover for a given batch have been established: 1Direct materials (2.8 lbs. @ $0.80)$2.242Direct labor (0.75 hr. @ $7.8)5.853Standard prime cost$8.09 During the year, 79,300 pounds of material were purchased and used for the changeover activity. There were 26,000 batches produced, with the following actual prime costs:Direct materials$50,946Direct labor (for 19,457 hrs.)$149,386 Required:1.Prepare a journal entry on Dec. 31 for the purchase of raw materials. Record the transaction as a compound entry.2.Prepare a journal entry on Dec. 31 for the issuance of raw materials. Record the transaction as a compound entry.3.Prepare a journal entry on Dec. 31 for the addition of labor to Work in Process. Record the transaction as a compound entry.4.Prepare a journal entry on Dec. 31 for the closing of variances to Cost of Goods Sold. Record the transaction as a compound entry. The image contains segments of a chart of accounts and a general journal layout, as typically used in accounting. Here's a detailed transcription suitable for an educational website:**Chart of Accounts:****Assets:**- 110 Cash- 120 Accounts Receivable- 131 Supplies- 132 Prepaid Insurance- 141 Materials- 142 Work in Process- 143 Overhead Control- 144 Finished Goods- 170 Land- 180 Equipment- 181 Accumulated Depreciation**Liabilities:**- 210 Accounts Payable- 220 Accrued Payroll- 230 Utilities Payable- 240 Lease Payable**Equity:**- 310 Common Stock- 320 Retained Earnings**Revenue:**- 410 Sales**Expenses:**- 510 Cost of Goods Sold- 511 Materials Price Variance- 512 Materials Usage Variance- 513 Labor Efficiency Variance- 514 Labor Rate Variance- 520 Insurance Expense- 530 Wages Expense- 540 Supplies Expense- 550 Utilities Expense- 560 Depreciation Expense- 590 Miscellaneous Expense---The image includes instructions for making journal entries for December 31:The instructions are to create journal entries for the following transactions:1. Purchase of raw materials.2. Issuance of raw materials.3. Addition of labor to Work in Process.4. Accrual of this period's factory overhead.**General Journal Layout:**The general journal page is identified as page 10 and includes columns for:- Date- Account- Post Ref. (Posting Reference)- Debit- CreditThis layout is typical for recording transactions in a double-entry bookkeeping system. Each journal entry involves a debit and a credit to appropriate accounts, ensuring that the accounting equation (Assets = Liabilities + Equity) remains balanced.

Standard costing: Under this costing method, the expected costs are used in the accounting records in place of actual costs and then these expected costs are compared with actual costs to analyze the variances. This costing method is useful in cost management and control. Direct materials: It is the basic input required to manufacture the finished products. The raw materials are processed by incurring conversion costs and other overhead to convert them into finished products. Direct labor: It is the cost of salaries and wages incurred directly to produce a product. This cost is incurred to convert the raw materials into finished product.

Answered: Deporte Company produces single-colored…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Deporte Company produces single-colored t-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following standards for changeover for a given batch have been established:

1	Direct materials (2.8 lbs. @ $0.80)	$2.24
2	Direct labor (0.75 hr. @ $7.8)	5.85
3	Standard prime cost	$8.09

During the year, 79,300 pounds of material were purchased and used for the changeover activity. There were 26,000 batches produced, with the following actual prime costs:

Direct materials	$50,946
Direct labor (for 19,457 hrs.)	$149,386

	Required:
1.	Prepare a journal entry on Dec. 31 for the purchase of raw materials. Record the transaction as a compound entry.
2.	Prepare a journal entry on Dec. 31 for the issuance of raw materials. Record the transaction as a compound entry.
3.	Prepare a journal entry on Dec. 31 for the addition of labor to Work in Process. Record the transaction as a compound entry.
4.	Prepare a journal entry on Dec. 31 for the closing of variances to Cost of Goods Sold. Record the transaction as a compound entry.

The image contains segments of a chart of accounts and a general journal layout, as typically used in accounting. Here's a detailed transcription suitable for an educational website:

**Chart of Accounts:**

**Assets:**
- 110 Cash
- 120 Accounts Receivable
- 131 Supplies
- 132 Prepaid Insurance
- 141 Materials
- 142 Work in Process
- 143 Overhead Control
- 144 Finished Goods
- 170 Land
- 180 Equipment
- 181 Accumulated Depreciation

**Liabilities:**
- 210 Accounts Payable
- 220 Accrued Payroll
- 230 Utilities Payable
- 240 Lease Payable

**Equity:**
- 310 Common Stock
- 320 Retained Earnings

**Revenue:**
- 410 Sales

**Expenses:**
- 510 Cost of Goods Sold
- 511 Materials Price Variance
- 512 Materials Usage Variance
- 513 Labor Efficiency Variance
- 514 Labor Rate Variance
- 520 Insurance Expense
- 530 Wages Expense
- 540 Supplies Expense
- 550 Utilities Expense
- 560 Depreciation Expense
- 590 Miscellaneous Expense

---

The image includes instructions for making journal entries for December 31:
The instructions are to create journal entries for the following transactions:
1. Purchase of raw materials.
2. Issuance of raw materials.
3. Addition of labor to Work in Process.
4. Accrual of this period's factory overhead.

**General Journal Layout:**

The general journal page is identified as page 10 and includes columns for:

- Date
- Account
- Post Ref. (Posting Reference)
- Debit
- Credit

This layout is typical for recording transactions in a double-entry bookkeeping system. Each journal entry involves a debit and a credit to appropriate accounts, ensuring that the accounting equation (Assets = Liabilities + Equity) remains balanced.

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