Howard Inc. developed the following standards for 2016: The company planned to produce 120000 units of product and work at the 120000 direct labor level of activity in 2016. The company uses a standard cost accounting system which records standard costs in the accounts and recognizes variances in the accounts at the earliest opportunity. During 2016 116000 actual units of product were produced.
Instructions
Prepare the journal entries to record the following transactions for Howard Inc. during 2016.
(a) Purchased 588000 pounds of raw materials for $4.90 per pound on account.
(b) Actual direct labor payroll amounted to $2108000 for 114000 actual direct labor hours worked. Factory labor cost is to be recorded and distributed to production.
(c) Direct materials issued for production amounted to 588000 pounds which actually cost $4.90 per pound.
(d) Actual manufacturing overhead costs incurred were $1152000 in 2016.
(e) Manufacturing overhead was applied when the 116000 units were completed.
(f) Transferred the 116000 completed units to finished goods.

Question

Howard Inc. developed the following standards for 2016:  The company planned to produce 120000 units of product and work at the 120000 direct labor level of activity in 2016. The company uses a standard cost accounting system which records standard costs in the accounts and recognizes variances in the accounts at the earliest opportunity. During 2016 116000 actual units of product were produced.
Instructions
Prepare the journal entries to record the following transactions for Howard Inc. during 2016.
(a) Purchased 588000 pounds of raw materials for $4.90 per pound on account.
(b) Actual direct labor payroll amounted to $2108000 for 114000 actual direct labor hours worked. Factory labor cost is to be recorded and distributed to production.
(c) Direct materials issued for production amounted to 588000 pounds which actually cost $4.90 per pound.
(d) Actual manufacturing overhead costs incurred were $1152000 in 2016.
(e) Manufacturing overhead was applied when the 116000 units were completed.
(f) Transferred the 116000 completed units to finished goods.

Quizplus · Accepted Answer

The Answer of Howard Inc. developed the following standards for 2016:  The company planned to produce 120000 units of product and work at the 120000 direct labor level of activity in 2016. The company uses a standard cost accounting system which records standard costs in the accounts and recognizes variances in the accounts at the earliest opportunity. During 2016 116000 actual units of product were produced.
Instructions
Prepare the journal entries to record the following transactions for Howard Inc. during 2016.
(a) Purchased 588000 pounds of raw materials for $4.90 per pound on account.
(b) Actual direct labor payroll amounted to $2108000 for 114000 actual direct labor hours worked. Factory labor cost is to be recorded and distributed to production.
(c) Direct materials issued for production amounted to 588000 pounds which actually cost $4.90 per pound.
(d) Actual manufacturing overhead costs incurred were $1152000 in 2016.
(e) Manufacturing overhead was applied when the 116000 units were completed.
(f) Transferred the 116000 completed units to finished goods.