Newell Company Developed the Following Standards for 2011

Essay

Newell Company developed the following standards for 2011:
The company planned to produce 90,000 units of product and work at the 90,000 direct labor level of activity in 2011. 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 2011, 87,000 actual units of product were produced.
Instructions
Prepare the journal entries to record the following transactions for Newell Company during 2011.
(a) Purchased 441,000 pounds of raw materials for $4.90 per pound on account.
(b) Actual direct labor payroll amounted to $1,581,000 for 85,500 actual direct labor hours worked. Factory labor cost is to be recorded and distributed to production.
(c) Direct materials issued for production amounted to 441,000 pounds which actually cost $4.90 per pound.
(d) Actual manufacturing overhead costs incurred were $864,000 in 2011.
(e) Manufacturing overhead was applied when the 87,000 units were completed.
(f) Transferred the 87,000 completed units to finished goods.