Heritage Furniture Co. uses a standard cost system. One of the company's most popular products
is an oak entertainment center that looks like an old icebox but houses a television, stereo, or other
electronic components. The per-unit standard costs of the entertainment center, assuming a "nor-
mal" volume of 1,000 units per month, are as follows.
Direct materials, 100 board-feet of wood at $1.30 per foot
Direct labor, 5 hours at $8.00 per hour
Manufacturing overhead (applied at $22 per unit)
Fixed ($15,000+ 1,000 units of normal production)
Variable
Total standard unit cost
$130.00
40.00
$15.00
7.00
22.00
$192.00
During July, 800 entertainment centers were scheduled and produced at the following actual unit
costs.
Direct materials, 110 feet at $1.20 per foot
Direct labor, 5\frac{1}{2} hours at $7.80 per hour
Manufacturing overhead, $18,480 ÷ 800 units
Total actual unit cost
$132.00
42.90
23.10
$198.00
Prepare journal entries to assign manufacturing costs to the work in
process inventory account and to record cost variances for July. Use
separate entire for (1) direct materials, (2) direct labor, and (3) overhead
costs.
