The Chen Company Uses a Standard Cost System

question 139

Essay

The Chen Company uses a standard cost system.As such,all of its inventories are carried on the books at standard,not actual,cost.During the most recent accounting period,the company had the following summary transactions:
(A)Purchased,on credit,direct materials;the standard cost of these materials was $30,000,while the actual cost was $32,000.
(B)Issued to production direct materials.The standard cost of materials that should have been used for this period's output was $35,000,while the standard cost of materials actually used in production during the period was $33,000.
(C)Actual direct labor cost,which has been incurred but not yet paid,for the period was $75,000.The standard direct labor cost for this period's output was $80,000.The direct labor efficiency variance for the period was $10,000(F).
(D)For the units completed during the period,the standard direct labor cost was $78,000,while the standard direct materials cost was $34,000.
(E)For the units sold during the period,the standard materials cost was $30,000,while the standard direct labor cost was $76,000
Required: Given the above information,provide the correct journal entries for the following:
(A)Purchase of direct materials
(B)Issuance of materials to production.
(C)Direct labor cost for the period.
(D)The labor and materials cost associated with finished production this period.
(E)The labor and materials cost associated with items sold during the period.

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Definitions:

Daily Settlement

The process of settling trades at the end of each trading day, including the calculation of gains and losses.

Maintenance Margin

The minimum amount of equity that must be maintained in a margin account after a purchase has been made, in order to keep the account open.

Trader's Margin

The amount of equity contributed by a trader as a percentage of the current market value of the securities held in a trading account.

Established Value

The perceived worth or market value of an asset or company that has been recognized by investors or markets.