Deporte Company produces single-colored t-shirts. Materials for the shirts are dyed in large vats. After...
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Deporte Company produces single-colored t-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following standards for changeover for a given batch have been established:
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1
Direct materials (2.4 lbs. @ $0.80)
$1.92
2
Direct labor (0.80 hr. @ $7.4)
5.92
3
Standard prime cost
$7.84
During the year, 71,550 pounds of material were purchased and used for the changeover activity. There were 27,000 batches produced, with the following actual prime costs:
Prepare the Dec. 31 journal entries for the (1) purchase of raw materials, (2) issuance of raw materials, (3) addition of labor to Work in Process, and the (4) closing of variances to Cost of Goods Sold. Refer to the Chart of Accounts for the exact wording of account titles. Record each transaction as a compound entry.
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