>> Financial Accounting
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 2.5 yards of material at $54 per yard for each parka. The standard cost for labor is 3.4 hours at $34 per hour. Standard overhead is $14 per unit. For the year 2015, expected production is 7,900 parkas with fixed overhead of $51,000 and variable overhead of $6.1 per parka.
During 2015, 8,500 parkas were manufactured. The company purchased 23,600 yards of material at a cost of $1,345,200. Production required 22,200 yards of material. The cost of direct labor was $1,040,000 for 27,700 hours. Actual overhead for the year was $86,300. All purchases are on account.
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.