Pentyl Company manufactures t-shirts.During the year, it manufactured 100,000 t-shirts, using 3 hours of direct labor at a rate of $7 per hour.The materials and labor standards for manufacturing the t-shirts are as follows:

- It took Pentyl 600,000 yards at $3.50 per yard to make the 100,000 t-shirts.
What is the entry to record the issuance and usage of materials?

Question

Pentyl Company manufactures t-shirts.During the year, it manufactured 100,000 t-shirts, using 3 hours of direct labor at a rate of $7 per hour.The materials and labor standards for manufacturing the t-shirts are as follows:

- It took Pentyl 600,000 yards at $3.50 per yard to make the 100,000 t-shirts.
What is the entry to record the issuance and usage of materials?

Quizplus · Accepted Answer

Materials = Standard price × Actual quantity = $4 × 600,000 = $2,400,000
Work in process = Standard quantity × Standard price = (100,000 × 5) × $4 = $2,000,000
Material usage variance = [600,000 - (100,000 × 5)] × $4 = $400,000 U

Pentyl Company Manufactures T-Shirts