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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