Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller. Direct labor:                               Direct material:Quantity, .25 hour                      Quantity, 4 kilogramsRate, $16 per hour                      Price,$.80 per kilogram Actual material purchases amounted to 240,000 kilograms at $.81 per kilogram. Actual costs incurred in the production of 50,000 units were as follows:Direct labor:                  $211,900 for 13,000 hoursDirect material:             $170,100 for 210,000 kilograms Prepare journal entries to:1. Record the purchase of direct material on account.2. Add direct-material and direct-labor cost to Work-in-Process Inventory.3. Record the direct-material and direct-labor variances.4. Close these variances into Cost of Goods Sold.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller.

Direct labor:                               Direct material:
Quantity, .25 hour                      Quantity, 4 kilograms
Rate, $16 per hour                      Price,$.80 per kilogram

Actual material purchases amounted to 240,000 kilograms at $.81 per kilogram. Actual costs incurred in the production of 50,000 units were as follows:
Direct labor:                  $211,900 for 13,000 hours
Direct material:             $170,100 for 210,000 kilograms

Prepare journal entries to:
1. Record the purchase of direct material on account.
2. Add direct-material and direct-labor cost to Work-in-Process Inventory.
3. Record the direct-material and direct-labor variances.
4. Close these variances into Cost of Goods Sold.

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