The ABD Company uses a standard cost accounting system and estimates production for the year to be 60,000 units. At this volume, the company's variable overhead costs are $.50 per direct labor hour.The company's single product has a standard cost of $30.00 per unit. Included in the $30.00 is $13.20 for direct materials and $12.00 of direct labor. Production information for the month of March follows:
- Number of units produced 6,000
- Materials purchased $88,800
- Materials used in production 18,500
- Direct labor cost incurred $75,400
Required: Prepare the journal entries to record the following:
a. Purchase and use of direct materials.
b. Recognition of direct labor.