Darren Company Adopted a Standard Cost System Several Years Ago

question 134

Essay

Darren Company adopted a standard cost system several years ago.The standard costs for the prime costs of its single product are as follows:

$$\begin{array} { | l | l | } \hline \text { Material: } 8 \text { klograms } @ \$ 5 \text { per kilogram } & \$ 40.00 \\\hline \text { Labor: } 6 \text { hours } @ \$ 8.20 \text { per hour } & \$ 49.20 \\\hline\end{array}$$ The following operating data were taken from the records for November: $$\begin{array} { | l | l | } \hline \text { Units completed } & 5,600 \text { units } \\\hline \text { Budgeted output } & 6,000 \text { units } \\\hline \text { Purchase of materials } & 50,000 \text { kilograms } \\\hline \text { Total actual labor costs } & \$ 300,760 \\\hline \text { Actual labor hours } & 36,500 \text { hours } \\\hline \text { Material efficiency (quantity) variance } & \$ 1,500 \text { unfavorable } \\\hline \text { Total material variance } & \$ 750 \text { unfavorable } \\\hline\end{array}$$ Required:
Prepare the journal entries to record the following:
a.Purchase and use of direct materials (Assume materials are used as purchased and no inventory is maintained).b.Recognition of direct labor.

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Definitions:

Detaches Emotionally

The process or action by which an individual emotionally withdraws or distances themselves from others or certain situations.

Disappointment

The feeling of sadness or displeasure caused by the nonfulfillment of one's hopes or expectations.

Lifetime

The duration or extent of time that an individual exists or a specific entity or event occurs.

Increased

Describes a process or trend where there is an augmentation or rise in the level, number, or amount of something.