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

question 62

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.

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Definitions:

Phototropism

Growth response of plant stems to light; stems demonstrate positive phototropism.

Gravitropism

Growth response of roots and stems of plants to the Earth’s gravity; roots demonstrate positive gravitropism, and stems demonstrate negative gravitropism.

Auxin

A class of plant hormones that regulates growth and facilitates various developmental processes, including cell elongation.

Stolons

Horizontal connections between organisms, especially plants, that allow for asexual reproduction and the spread of the organism.