Viking Corp

question 47

Essay

Viking Corp. uses a standard cost system to account for the costs of its product. (It only has one product.) Material standards are 13 pounds of material at $1.40 per pound and 3 hours of labor at a standard wage rate of $14. During November, Viking Corp. produced and sold 2,300 units. Material purchases totaled 30,100 pounds at a total cost of $42,650. Material usage totaled 29,970 pounds. Payroll totaled $97,780 for 7,140 hours worked. Viking Corp. does not maintain inventories other than direct materials. Prepare journal entries to record the following transactions.
a. Direct materials purchase
b. Direct materials usage
c. Direct labor incurred

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Definitions:

AOQ

Average Order Quantity; the mean volume of goods ordered over a specific period of time, reflecting purchasing behavior.

Population Percent Defective

The percentage of items in a defined population that do not meet predefined standards or specifications.

Producer's Risk

The risk that a producer takes when a good batch is incorrectly rejected based on the sample quality test results, also known as Type I error in statistical testing.

Acceptance Sampling Plan

A statistical quality control method that determines the number of units from a batch to inspect to decide if the entire batch should be accepted or rejected.