9-1 THROUGH 9-5 USE THE FOLLOWING DATA: The standard operating cacity of Corona

Question

9-1 THROUGH 9-5 USE THE FOLLOWING DATA:

The standard operating cacity of Corona Manufacturing Co. is 1000 units. A detailed study of the manufacturing data relating to the standard production cost of one product reaveled the following:

1. 2 lbs of materials are needed to produce 1 unit

2. Standard unit cost of materials is $8 per lb

3.It takes 1 hr of labor to produce 1 unit

4. Standard labor rate is $10 per hr

5. Standard overhead for this volume is $4000

EACH CASE IN 9-1 THROUGH 9-5 REQUIRES THE FOLLOWING:

a) Set up standard cost summary showing the standard unit cost.

b) Analyze the variances for materials and labor

c) Make journal entries to record the transfer to WIP of:

1. Material costs

2. Labor costs

3. Overhead costs   

*When making these entries, include variances.)

d) Prepare the journal entry to record the transfer of costs to the finished goods account.

Problem 9-3

COMPUTING STANDARD UNIT COST; VARIANCE ANALYSIS; JOURNAL ENTRIES

All of the deviations listed in 9-1 and 9-2 took place, and 1000 units were started and finished. (Note that the quantities used will affect the rate variances for materials and labor.)

Explanation / Answer

a)

Actual data for calculating variance with standard not given.

Standard Cost summary Standard per Unit of product: Standard Quantity = 2 Lbs Standard Rate = $ 8 per lb Standard Hour = 1 hr Standard Labour rate = 10 per hr Standard Overhead = $4,000

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