Bechtel Technical Clothing produces parkas used by arctic explorers, mountain cl
ID: 2446584 • Letter: B
Question
Bechtel Technical Clothing produces parkas used by arctic explorers, mountain climbers, and people living in Minnesota. The company uses a standard costing system, and standards call for 2.5 yards of material at $55 per yard for each parka. The standard cost for labor is 3.4 hours at $34 per hour. Standard overhead is $14 per unit. For the year 2015, expected production is 7,600 parkas with fixed overhead of $58,000 and variable overhead of $6.4 per parka.
During 2015, 8,500 parkas were manufactured. The company purchased 24,900 yards of material at a cost of $1,419,300. Production required 22,300 yards of material. The cost of direct labor was $1,040,000 for 27,800 hours. Actual overhead for the year was $93,500. All purchases are on account.
(a)
Account Titles and Explanation
Debit
Credit
(To record the purchase of raw material)
Bechtel Technical Clothing produces parkas used by arctic explorers, mountain climbers, and people living in Minnesota. The company uses a standard costing system, and standards call for 2.5 yards of material at $55 per yard for each parka. The standard cost for labor is 3.4 hours at $34 per hour. Standard overhead is $14 per unit. For the year 2015, expected production is 7,600 parkas with fixed overhead of $58,000 and variable overhead of $6.4 per parka.
During 2015, 8,500 parkas were manufactured. The company purchased 24,900 yards of material at a cost of $1,419,300. Production required 22,300 yards of material. The cost of direct labor was $1,040,000 for 27,800 hours. Actual overhead for the year was $93,500. All purchases are on account.
Explanation / Answer
Journal Entry to Record the purchase:
Account Title and Explanation Debit Credit Inventories 1,419,300 Account Payable 1,419,300 (To record the purchase of raw materials)Related Questions
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