Atlace Manufacturers Uses a Standard Costing System *Allocated Based on Direct Labor Hours

question 57

Essay

Atlace Manufacturers uses a standard costing system. Data on standard costs and actual costs are as follows:
$\begin{array} { l r r } \text { Direct materials: } & \text { Standard } & \text { Actual } \\ \text { Raw material units per unit of output } & 2.0 & 3.3 \\ \text { Price per unit of raw material } & \$ 5.00 & \$ 4.80 \\ \text { Materials cost per unit } & \$ 10.00 & \$ 16.00 \\ \text { Number of units } & 3,000 & 3,000 \\ \text { Direct materials cost } & \$ 30,000 & \$ 48,000 \end{array}$
$\begin{array} { l r r } \text { Direct labor: } & \text { Standard } & \text { Actual } \\ \text { Hours per unit } & 0.5 & 0.4 \\ \text { Cost per hour } & \$ 18.00 & \$ 20.00 \\ \text { Labor cost per unit } & \$ 9.00 & \$ 8.00 \\ \text { Number of units } & 3,000 & 3,000 \\ \text { Direct labor cost } & \$ 27,000 & \$ 24,000 \end{array}$
$\begin{array} { l r r } \text { Variable overhead* } & \text { Standard } & \text { Actual } \\ \text { Hours per unit } & 0.5 & 0.4 \\ \text { Cost per hour } & \$ 30.00 & \$ 29.00 \\ \text { Variable overhead cost per unit } & \$ 15.00 & \$ 11.60 \\ \text { Number of units } & 3,000 & 3,000 \\ \text { Variable overhead cost } & \$ 45,000 & \$ 34,800 \end{array}$
*allocated based on direct labor hours
$\begin{array} { l r r } \text { Fixed overhead* } & \text { Standard } & \text { Actual } \\ \text { Hours per unit } & 0.5 & 0.4 \\ \text { Cost per hour } & \$ 10.00 & \$ 9.00 \\ \text { Fixed overhead cost per unit } & \$ 5.00 & \$ 3.60 \\ \text { Number of units } & 3,000 & 3,000 \\ \text { Fixed overhead cost } & \$ 15,000 & \$ 10,800 \end{array}$
*allocated on the basis of direct labor hours
Give journal entry to transfer the cost of units from Work-in-Process Inventory to Finished Goods Inventory.

Analyze cyclical effects in time series data.

Understand and apply the concept of seasonal adjustment in time series.

Plot and interpret trends and forecasted values from time series data.

Understand the concept and application of p charts in monitoring process characteristics.

---

Definitions:

Endowment Effect

The phenomenon in which people ascribe more value to things merely because they own them.

Loss Aversion

A concept in behavioral economics stating that individuals prefer avoiding losses to acquiring equivalent gains, showing that losses have a greater emotional impact than gains.

Framing

The way information and messages are presented and structured to influence people's perceptions, decisions, and judgments.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that consumers are willing to purchase.