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 color Following standards for changeover for a given batch have been established: 1 Direct materials (2.8 lbs. @ $0.80) 2 Direct labor (0.75 hr. @ $7.8) 3 Standard prime cost $2.24 5.85 $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 $50,948 Direct labor (for 19.457 hrs.) $149.380 Required: 1. Prepare a joumal entry on Dec. 31 for the purchase of raw materials. Record the transaction as a compound entry. 2. Prepare a joumal entry on Dec. 31 for the issuance of raw materials. Record the transaction as a compound entry. 3. Prepare a joumal entry on Dec. 31 for the addition of labor to Work in Process. Record the transaction as a compound entry.
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 color Following standards for changeover for a given batch have been established: 1 Direct materials (2.8 lbs. @ $0.80) 2 Direct labor (0.75 hr. @ $7.8) 3 Standard prime cost $2.24 5.85 $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 $50,948 Direct labor (for 19.457 hrs.) $149.380 Required: 1. Prepare a joumal entry on Dec. 31 for the purchase of raw materials. Record the transaction as a compound entry. 2. Prepare a joumal entry on Dec. 31 for the issuance of raw materials. Record the transaction as a compound entry. 3. Prepare a joumal entry on Dec. 31 for the addition of labor to Work in Process. Record the transaction as a compound entry.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text: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 28,000 batches produced, with the following actual prime costs:
Direct materials
$50,946
Direct labor (for 19,457 hrs.)
$140,386
Required:
1. Prepare a joumal entry on Dec. 31 for the purchase of raw materials. Record the transaction as a compound entry.
2. Prepare a joumal entry on Dec. 31 for the issuance of raw materials. Record the transaction as a compound entry.
3. Prepare a joumal entry on Dec. 31 for the adoition of labor to Work in Process. Record the transaction as a compound entry.
4. Prepare a joumal entry on Dec. 31 for the closing of variances to Cost of Goods Sold. Record the transaction as a compound entry.
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