Marlin Manufacturing Uses a Standard Cost System *Allocated Based on Direct Labor Hours

question 178

Essay

Marlin Manufacturing uses a standard cost system.Data on standard costs and actual costs are as follows:
$\begin{array}{lll}\text { Direct materials: } & \text { Standard } & \text { Actual } \\\text { Direct materials units per unit of output } & 2.0 & 3.3 \\\text { Cost per unit of direct materials } & \$ 5.00 & \$ 4.80 \\\text { Direct materials cost per unit } & \$ 10.00 & \$ 16.00 \\\text { Number of units } & 3,000 & 3,000 \\\text { Direct materials cost } & \$ 30,000 & \$ 48,000\end{array}$ $\begin{array}{lll}\text { Direct labor: } & \text { Standard } & \text { Actual } \\\text { Hours per unit } & 0.5 & 0.4 \\\text { Cost per hour } & \$ 18.00 & \$ 20.00 \\\text { Labor cost per unit } & \$ 9.00 & \$ 8.00 \\\text { Number of units } & 3,000 & 3,000 \\\text { Direct labor cost } & \$ 27,000 & \$ 24,000\end{array}$ $\begin{array}{lll}\text { Variable overhead* }&\text { Standard }&\text { Actual }\\\text { Hours per unit } & 0.5 & 0.4 \\\text { Cost per hour } & \$ 30.00 & \$ 29.00 \\\text { Variable overhead cost per unit } & \$ 15.00 & \$ 11.60 \\\text { Number of units } & 3,000 & 3,000 \\\text { Variable overhead cost } & \$ 45.000 & \$ 34.800\end{array}$ *allocated based on direct labor hours
$\begin{array}{lll}\text { Fixed overhead* } & \text { Standard } & \text { Actual } \\\text { Hours per unit } & 0.5 & 0.4 \\\text { Cost per hour } & \$ 10.00 & \$ 9.00 \\\text { Fixed overhead cost per unit } & \$ 5.00 & \$ 3.60 \\\text { Number of units } & 3,000 & 3,000 \\\text { Fixed overhead cost } & \$ 15,000 & \$ 10,800\end{array}$ *allocated on the basis of direct labor hours
Give the journal entry to transfer the cost of units from Work-in-Process Inventory to Finished Goods Inventory.Omit explanation.

Understand the conditions under which a surety or guarantor is discharged from obligation.

Differentiate between types of collateral as classified in the Code.

Recognize the legal remedies and rights available to sureties.

Appreciate the implications of buying property with existing security interests or mortgages.

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