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

question 82

Essay

Atlace Manufacturers uses a standard costing system. Data on standard costs and actual costs are as follows:
$\begin{array}{lll}\text { Direct materials: } & \text { Standard } & \text { Actual } \\\text { Raw material units per unit of output } & 2.0 & 3.3 \\\text { Price per unit of raw material } & \$ 5.00 & \$ 4.80 \\\text { Materials cost per unit } & \$ 10.00 & \$ 16.00 \\\text { Number of units } & 3,000 & 3,000 \\\text { Direct materials cost } & \$ 30,000 & \$ 48,000\end{array}$ $\begin{array}{lll}\text { Direct labor: } & \text { Standard } & \text { Actual } \\\text { Hours per unit } & 0.5 & 0.4 \\\text { Cost per hour } & \$ 18.00 & \$ 20.00 \\\text { Labor cost per unit } & \$ 9.00 & \$ 8.00 \\\text { Number of units } & 3,000 & 3,000 \\\text { Direct labor cost } & \$ 27,000 & \$ 24,000\end{array}$ $\begin{array}{lll}\text { Variable overhead } & \text { Standard } & \text { Actual } \\\text { Hours per unit } & 0.5 & 0.4 \\\text { Cost per hour } & \$ 30.00 & \$ 29.00 \\\text { Variable overhead cost per unit } & \$ 15,00 & \$ 11.60 \\\text { Number of units } & 3,000 & 3,000 \\\text { Variable overhead cost } & \$ 45,000 & \$ 34,800\end{array}$ *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 journal entry to transfer the cost of units from Work-in-Process Inventory to Finished Goods Inventory.

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Definitions:

Storage Capacity

The maximum amount of data that can be stored in a given storage medium or device.

Derived Demand

Demand for one product that occurs because of demand for a related product.

Related Product

Goods or services that are associated with or complementary to another product, often enhancing its value or utility.

Demand

The desire of purchasers, consumers, or clients for a particular good or service accompanied by the ability to pay for it.