9-1 THROUGH 9-5 USE THE FOLLOWING DATA:
The standard operating cacity of Corona Manufacturing Co. is1000 units. A detailed study of the manufacturing data relating tothe standard production cost of one product reaveled thefollowing:
1. 2 lbs of materials are needed to produce 1 unit
2. Standard unit cost of materials is $8 per lb
3.It takes 1 hr of labor to produce 1 unit
4. Standard labor rate is $10 per hr
5. Standard overhead for this volume is $4000
EACH CASE IN 9-1 THROUGH 9-5 REQUIRES THE FOLLOWING:
a) Set up standard cost summary showing the standard unitcost.
b) Analyze the variances for materials and labor
c) Make journal entries to record the transfer to WIP of:
1. Material costs
2. Labor costs
3. Overhead costs
*When making these entries, include variances.)
d) Prepare the journal entry to record the transfer of costs tothe finished goods account.
STANDARD UNIT COST; VARIANCE ANALYSIS; JOURNAL ENTRIES
1000 units were started and finished
Case1: All prices and quantities for the cost elements arestandard, exept for materials cost, which is $8.50 per lb.
Case 2: All prices and quantities for the cost element arestandard, exept that 1900 lb of materials were used.