The Morroco Company Uses a Standard Cost Accounting System and Estimates

question 135

Essay

The Morroco Company uses a standard cost accounting system and estimates production for the year to be 60,000 units.At this volume,the company's variable overhead costs are $0.50 per direct labor hour.The company's single product has a standard cost of $30.00 per unit.Included in the $30.00 is $13.20 for direct materials (3 yards)and $12.00 of direct labor (2 hours).Production information for the month of March follows: $$\begin{array} { | l | r | } \hline \text { Number of units produced } & 4,500 \\\hline \text { Materials purchased (13,300 yards) } & \$ 61,600 \\\hline \text { Materials used in production bards) } & 13,300 \\\hline \text { Variable overhead costs incurred } & \$ 4,380 \\\hline \text { Fixed overhead costs incurred } & \$ 20,400 \\\hline \text { Direct labor cost incurred (\$6.25ihour) } & \$ 57,750 \\\hline\end{array}$$
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.c.Incurring actual overhead.d.Application of overhead to production.e.Closing of overhead accounts and recognizing variances.f.Transferring production to finished goods.

Comprehend the effects of certified cheques on the relationship between the drawer and the payee.

Identify the negotiation process for bills of exchange and the role of endorsements.

Understand defences available against claims on negotiable instruments.

Distinguish between holders and holders in due course and their rights.

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Definitions:

Hierarchical Levels

The different layers of authority and responsibility within an organizational structure, often depicted as a pyramid.

Service-providing Industries

Sectors that involve offering intangible goods or services to consumers, such as healthcare, finance, and education.

Total Costs

The aggregate amount of all expenses associated with the production of a good or the operation of a business.

Larger Firms

Companies or businesses that employ a large number of workers and typically have a substantial volume of business operations and market influence.