Fisher Manufacturing uses a standard cost system

Question

Data on standard costs and actual costs are as follows:

Direct materials: Standard Actual
Direct materials units per unit of output 2.0 3.3
Sales price per unit of direct materials $5.00 $4.80
Direct materials cost per unit $10.00 $16.00
Number of units 3,000 3,000
Direct materials cost $30,000 $48,000

Direct labor: Standard Actual
Hours per unit 0.5 0.4
Cost per hour $18.00 $20.00
Labor cost per unit $9.00 $8.00
Number of units 3,000 3,000
Direct labor cost $27,000 $24,000

Variable overhead* Standard Actual
Hours per unit 0.5 0.4
Cost per hour $30.00 $29.00
Variable overhead cost per unit $15.00 $11.60
Number of units 3,000 3,000
Variable overhead cost $45,000 $34,800
*allocated based on direct labor hours

Fixed overhead* Standard Actual
Hours per unit 0.5 0.4
Cost per hour $10.00 $9.00
Fixed overhead cost per unit $5.00 $3.60
Number of units 3,000 3,000
Fixed overhead cost $15,000 $10,800
*allocated on the basis of direct labor hours

Give the journal entry to transfer the cost of units from Work-in-Process Inventory to Finished Goods Inventory.

What will be an ideal response

Answer 1

Finished Goods Inventory 117,000
Work-in-Process Inventory 117,000 .Direct materials cost 30,000
Direct labor cost 27,000
Variable overhead cost 45,000
Fixed overhead cost 15,000
Total cost of production $117,000