Question

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.

Problem 9-1

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.