Question: The normal capacity of Algonquin Adhesives Inc is 40 000 direct

The normal capacity of Algonquin Adhesives Inc. is 40,000 direct labor hours and 20,000 units per month. A finished unit requires 6 lb of materials at an estimated cost of $2 per pound. The estimated cost of labor is $10.00 per hour. The plant estimates that overhead (all variable) for a month will be $40,000. During the month of March, the plant totaled 34,800 direct labor hours at an average rate of $9.50 an hour. The plant produced 18,000 units, using 105,000 lb of materials at a cost of $2.04 per pound.
1. Prepare a standard cost summary showing the standard unit cost.
2. Make journal entries to charge materials and labor to Work in Process.

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  • CreatedMarch 31, 2015
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