Boron Chemical Company produces a synthetic resin

Exercise 13-56 (Appendix): Journal Entries in a Standard Cost System        
Background - Boron Chemical Company produces a synthetic resin that is used in the automotive industry. The company uses a standard cost sysem. For each gallon of output, the following direct manufacturing costs are anticipated.      

       
Problem Information        
        
Output standards:        
 Hours Wage Rate Total/Unit     
     Direct labor 2 $25.00 $50.00     
        
 Gals. Cost/Gal. Total/Unit     
     DM 2 $10.00 $20.00     
        
Actual Results, December 2007:        
     Gallons of output produced  2,500      
     DLHs worked  4,900      
     Actual wage rate (average)  $19.50      
     DM purchases (gallons)  6,000      
     Act. DM cost/gallon purchased  $10.45      
     Gals. Issued to production  5,100      
     Units (gallons) sold  2,000      
     Selling price per unit (gal.)  $150.00      
        
The company's practice is to record the price variance for materials at point of purchased.               
        
13-56 Requirements        
        
Give journal entries for the following events and transactions:        
1. Purchase, on credit, of direct materials.        
2. Direct materials issued to production.        
3. Direct labor cost of units completed this period        
4. Direct manufacturing cost (direct labor plus direct materials) of units completed and transferred to         
    Finished Goods Inventory.        
5. Sale, for $150 per gallon, of 2,000 gallons of output. (Hint: you will need two journal entries here.)