The Norris Company Uses a Standard Cost Accounting System and Estimates

question 42

Essay

The Norris 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 $0.50 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 (3 yards) and $12.00 of direct labor (2 hours). Production information for the month of March follows:
$$\begin{array} { l r } \text { Nurnber of units produced } & 6,000 \\\text { Materials purchased (18,500yards) } & \$ 88,800 \\\text { Materials used in production (yards) } & 18,500 \\\text { Direct labor cost incured (\$6.50/hour) } & \$ 75,400\end{array}$$
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.

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Definitions:

ECG

Electrocardiogram, a test that records the electrical activity of the heart to detect any abnormalities.

Lead Arrangement

In electrocardiography, lead arrangement refers to the setup of electrodes on the body to measure the heart's electrical activity from various angles.

Electrodes

Conductive materials or devices used to make electrical contact with a nonmetallic part of a circuit, often found in batteries, electrolysis processes, and medical devices like ECG machines.

ECG

Electrocardiogram, a medical test that measures the electrical activity of the heart to assess heart health and detect abnormalities.