Book: Cost Management A Strategy Emphasis by Blocher
Chapter 14: Operational Performance Measurement:
Sales, Direct-Cost Variance, and the role of nonfinancial performance measures
14-40
Journal Entries in a Standard Cost System
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:
During December of 2013, Boron produced a
total of 2,500 gallons of output and incurred the following direct
manufacturing costs:
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Required:
Give 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, for $150 per gallon of
2,000 gallons of output. (Hint. You will need two journal entries here.)
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