(Variance calculation and journal entries) Quebec Ltd. makes small plastic toys. Following are standard quantities and standard costs for material and labor.

During October 1996, 100,000 toys were produced. The purchasing agent bought 29,000 pounds of material during the month at $1.88 per pound. October payroll for the factory revealed direct labor cost of $165,240 on 20,400 direct labor hours. During the month, 24,800 pounds of raw material were used in production.

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

b. Assuming a perpetual inventory system, prepare general journal entries for the month.LO1

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Material Labor STANDARD QUANTITY 1/4 pound 12 minutes STANDARD COST $2 per pound ($.50 per unit of output) $8 per hour ($1.60 per unit of output)