Making journal entries

Assume that during the month of April the production report of Austin Adhesives, Inc., in E8-10 revealed the following information:

Units produced during the month	21,000
Direct labor hours for the month	41,000
Materials purchased (in pounds)	130,000
Materials used (in pounds)	125,000
Labor rate per hour	$10.04
Materials cost per pound	$1.98

Make journal entries to charge materials (use the materials purchase price variance) and labor to Work in Process. (Remember to retrieve the standard costs from E8-10 before solving this exercise.)

E8-10

Preparing a standard cost summary and making journal entries:

the normal capacity of Austin Adhesives, Inc., is 40,000 direct labor hours and 20,000 units per month. A finished unit requires 6 pounds 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 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 pounds 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.