Reference no: EM132721017

Slick corporation is a small producer of synthetic motor oil. During may. The company produced 5000 cases of lubricant. Each case contains 12 quarts of synthetic oil. To achieve this level of production. Slick purchased and used 16500 gallons of direct materials at a cost of 20709 it also incurred average direct labor cost of 14 per hour for the 4232 hrs worked in may be its production personnel. Manufacturing overhead for the month totaled 9240 of which 2200 was considered fixed.

Slicks standard cost information for each case of synthetic motor oil is as follows.

Direct materials standard price 1.30 per gallon
Standard quantity allowed per case 3.25g
Direct labor standard rate 16 per hr.
Standard hrs. allowed per case 0.75 direct labor hrs.
Fixed overhead budgeted 2600 per month
Normal level of production 5200 cases per month
Variable overhead application rate 1.50 per case
Fixed overhead application rate (2600/ 5200 cases) 0.50 per case
Total overhead application rate 2.00 per case

Problem a: prepare the journal entries to:
1. charge materials (at standard) to work in process
2. charge direct labor (at standard) to work in process
3. charge manufacturing overhead (at standard0 to work in process
4. transfer the cost of the 5000 cases of synthetic motor oil produced in May to finished goods.

Problem b: What is the following problems for 1-5? and explanation, not book explanation
1. Record the cost of direct materials charged to production
2. Record the cost of direct labor charged to production
3. Record entry to apply overhead to production
4. Record entry to transfer 5000 cases to finished goods in May
5. Record entry to close overhead variances to cost of goods sold