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 (2.4 lbs. @ $0.95)$2.282Direct labor (0.75 hr. @ $7.40)5.553Standard prime cost$7.83 During the year, 79,500 pounds of material were purchased and used for the changeover activity. There were 30,000 batches produced, with the following actual prime costs:Direct materials$ 63,000Direct labor (for 22,450 hrs.)$163,385 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.

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

Problem 1Q

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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 (2.4 lbs. @ $0.95)	$2.28
2	Direct labor (0.75 hr. @ $7.40)	5.55
3	Standard prime cost	$7.83

During the year, 79,500 pounds of material were purchased and used for the changeover activity. There were 30,000 batches produced, with the following actual prime costs:

Direct materials	$ 63,000
Direct labor (for 22,450 hrs.)	$163,385

	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.

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