(Variance calculation and journal entries) DomCapers Toy Co. makes small plastic toys having the following material and labor standards:

During October, 29,000 pounds of material were acquired at $4.15 per pound; only 25,300 pounds of that was used in production during the month to make 50,000 toys. Factory payroll for October showed 10,300 di¬ rect labor hours at a total cost of $160,680.

a. Compute material and labor variances, basing the material price variance on the quantity of material purchased.

b. Assuming a perpetual inventory system is used, prepare the relevant general journal entries for October.LO.1

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Material Labor Standard Quantity 0.5 pound 12 minutes Standard Cost $4.00 per pound ($2.00 per unit of output) 16.00 per hour ($3.20 per unit of output)