Problem 3 and 4 (Sitka Products Co) - 70944

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Problem 3 – 20 Points

Following is a list of costs incurred by the Sitka Products Co. during the month of June:

Direct materials used $12,000 Expired rent $3,000

Indirect materials used 3,000 Utilities 800

Direct labor employed 20,000 Repairs 700

Indirect labor employed 4,500 Depreciation expense

Selling expenses 6,000 --Machinery and equipment 1,200

Prepare the journal entries necessary to record the issuance of materials, the distribution of labor cost, the recording of factory overhead, and the entry transferring Factory Overhead to Work in Process.



Problem 4 – 20 Points

The estimated unit costs for a company to produce and sell a product at a level of 12,000 units per month are as follows:

Cost Item Estimated

Unit Cost

Direct material $32

Direct labor 20

Variable manufacturing overhead 15

Fixed manufacturing overhead 6

Variable selling expenses 3

Fixed selling expenses 4

a. What are the estimated conversion costs per unit?


b. What are the estimated prime costs per unit?

c. What are the estimated variable costs per unit?

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