Refer to the data in Exercise, regarding Saskatewan Can Company. Prepare journal entries to:
Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller.
Direct labor: ...........Direct material:
Quantity, .25 hour......Quantity, 4 kilograms
Rate, $16 per hour......Price, $.80 per Kilogram
Actual material purchases amounted to 240,000 kilograms at $.81 per kilogram. Actual costs incurred in the production of 50,000 units were as follows:
Direct labor: ...........$211,900 for 13,000 hours
Direct material: ..........$170,100 for 210,000 kilograms
1. Record the purchase of direct material on account.
2. Add direct-material and direct-labor cost to Work-in-Process Inventory.
3. Record the direct-material and direct-labor variances.
4. Close these variances into Cost of Goods Sold.