Martella company makes high- end shoes. The company uses a standard cost system and has set the following standard
for materials and labor for each pair of shoes.
leather ([email protected]$20) $120
direct labour (5h @$16). $80
total prime cost. $200
throughout the year Martella produced 125 pairs of shoes. They sold all of them. Actual leather purchased was 850 strips @$16 per strips. There was no beginning and ending inventory. Actual direct labor was 775 [email protected]$15 per hour.5.prepare the journal entries
a) to record the transfer of costs to work in processes inventory and record the variances
b)to record the transfer of costs to finished good inventory
c) to close the variance to cost of goods sold at the end of year
6) assume there was a labor Strike and the cost of the labor inefficiency was an extraordinary item. Prepare the journal entry to properly record the year end disposition of the labor variances.
7what might be a good way to check variance results to evaluate overall standard versus actual costs for the year