The Fort Company Produces and Sells a Single Product Required:
Prepare Journal Entries to Record:
A

question 131

Essay

The Fort Company produces and sells a single product. Standards have been established for the product as follows:
Direct materials: 5 pounds @ $3.50 per pound = $17.50.
Direct labor: 3 hours @ $5.50 per hour = $16.50.
Actual cost and usage figures for the past month follow:
$$\begin{array} { l c } \text { Units produced } & 750 \\\text { Direct materials used } & 4,000 \text { pounds } \\\text { Direct materials purchased (4,500 pounds) } & \$ 14,400 \\\text { Direct labor cost (2,000hours) } & \$ 1,200\end{array}$$
Required:
Prepare journal entries to record:
a. The purchase of raw materials.
b. The usage of raw materials in production.
c. The incurrence of direct labor cost.

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Definitions:

Total Return

The overall financial gain or loss on an investment, considering both capital gains and income such as interest or dividends.

Dividend

A portion of a company's earnings that is paid to shareholders, usually on a regular basis.

Nominal Rate

The officially declared or promoted rate of interest for a loan or investment, excluding the effects of compounding or any associated fees.

Loan

A borrowed sum of money that is expected to be paid back with interest.