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Homework answers / question archive / Boron Chemical Company produces a synthetic resin that is used in the automotive industry
Boron Chemical Company produces a synthetic resin that is used in the automotive industry. The company uses a standard cost system. For each gallon of output, the following direct manufacturing costs are anticipated:
Direct labor: 3.80 hours at $26.00 per hour 598.80
Direct materials: 3.80 gallons at $22.00 per gallon $83.60
Direct labor: 10,000 hours worked at an average wage rate of $21.30 per hour Direct materials: Purchased: 11,200 gallons @ $22.45 per gallon Used in production: 10,300 gallons
Prepare journal entries for the following events and transactions.
1. Purchase, on credit, of direct materials.
2. Direct materials issued to production.
3. Direct labor cost of units completed this period.
4. Direct manufacturing cost (direct labor plus direct materials) of units completed and transferred to Finished Goods Inventory.
5. Sale (on credit), for $330 per gallon, of 2,400 gallons of output. (Hint: You will need two journal entries here.)
(For all requirements, if no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.)
