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

question 98

Essay

Fisher Manufacturing uses a standard cost system.Data on standard costs and actual costs are as follows:
$$\begin{array} { l l l } \text { Direct materials: } & \text { Standard } & \text { Actual } \\\text { Direct materials units per unit of output } & 2 . 0 & 3 . 3 \\\text { Sales price per unit of direct materials } & \$ 5.00 & \$ 4.80 \\\text { Direct materials cost per unit } & \$ 10.00 & \$ 16.00 \\\text { Number of units } & 3 , 0 0 0 & 3 , 0 0 0 \\\text { Direct materials cost } & \$ 30,000 & \$ 48,000\end{array}$$ $\begin{array}{lll}\text { Direct labor: } & \text { Standard } & \text { Actual } \\\text { Hours per unit } & 0.5 & 0.4 \\\text { Cost per hour } & \$ 18.00 & \$ 20.00 \\\text { Labor cost per unit } & \$ 9.00 & \$ 8.00 \\\text { Number of units } & 3,000 & 3,000 \\\text { Direct labor cost } & \$ 27,000 & \$ 24,000\end{array}$
$$\begin{array} { l l l } \text { Variable overhead* } & \text { Standard } & \text { Actual } \\\text { Hours per unit } & 0 . 5 & 0 . 4 \\\text { Cost per hour } & \$ 30.00 & \$ 29.00 \\\text { Variable overhead cost per unit } & \$ 15.00 & \$ 11.60 \\\text { Number of units } & 3 , 0 0 0& 3 , 0 0 0\\\text { Variable overhead cost } & \$ 45,000 & \$ 34,800\end{array}$$ *allocated based on direct labor hours
$$\begin{array} { l l l } \text { Fixed overhead* } & \text { Standard } & \text { Actual } \\\text { Hours per unit } & 0.5 & 0.4 \\\text { Cost per hour } & \$ 10.00 & \$ 9.00 \\\text { Fixed overhead cost per unit } & \$ 5.00 & \$ 3.60 \\\text { Number of units } & 3 , 0 0 0 & 3 , 0 0 0 \\\text { Fixed overhead cost } & \$ 15,000 & \$ 10,000\end{array}$$ *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.

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Definitions:

Labour Market

The supply and demand for labor, where employers seek to hire workers and individuals seek employment.

HR Forecasting Process

The method used by human resources to estimate the future demand for and supply of employees needed to ensure the company's operations run smoothly.

Source of Human Capital

Origin from which an organization acquires its employees' knowledge, skills, and abilities, contributing to its competitiveness and success.

Internal Supply

Existing employees who can be retrained, promoted, transferred, or otherwise redeployed to fill anticipated future HR requirements.