The smith company uses a standard cost accounting system

Reference no: EM13592358

The Smith Company uses a standard cost accounting system and estimates production for the year to be 60,000 units. At this volume, the company's variable overhead costs are $.50 per direct labor hour.The company's single product has a standard cost of $30.00 per unit. Included in the $30.00 is $13.20 for direct materials and $12.00 of direct labor. Production information for the month of March follows:

Number of units produced 4,500
Materials purchased (13,300 yards) $61,600
Materials used in production (yards) 13,300
Variable overhead costs incurred $4,380
Fixed overhead costs incurred $20,400
Direct labor cost incurred ($6.25/hour) $57,750

Required: Prepare the journal entries to record the following:
a. Purchase and use of direct materials (Assume materials are used as purchased and no inventory is maintained).
b. Recognition of direct labor.
c. Incurring actual overhead
d. Application of overhead to production.
e. Closing of overhead accounts and recognizing variances.
f. Transferring production to finished goods.

Reference no: EM13592358

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