Bechtel Technical Clothing produces parkas used by arctic explorers, mountain climbers, and people living in Minnesota. The
Question:
Bechtel Technical Clothing produces parkas used by arctic explorers, mountain climbers, and people living in Minnesota. The company uses a standard costing system, and standards call for 3.5 yards of material at $45 per yard for each parka. The standard cost for labor is 4.5 hours at $25 per hour. Standard overhead is $15 per unit. For the year 2012, expected production is 6,000 parkas with fixed overhead of $54,000 and variable overhead of $6 per parka. During 2012, 6,200 parkas were manufactured. The company purchased 23,000 yards of material at a cost of $1,058,000.Production required 22,300 yards of material. The cost of direct labor was $715,000 for 27,500 hours. Actual overhead for the year was $91,000.
Required
a. Prepare a journal entry to record the purchase of material.
b. Prepare a journal entry to record material used in production.
c. Prepare a journal entry to record direct labor.
d. Prepare a journal entry to record actual overhead and overhead applied.
e. Prepare a journal entry to close the variances in requirements a through d to Cost of Goods Sold.
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a Material Price Variance AP SP AQ P 46 45 23000 23000 unfavorable Raw Material Inventory 1035000 Material Price Variance 23000 Accounts Payable 10580...View the full answer
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