Lopez Manufacturing uses a standard cost accounting system. Some of the ledger accounts have been destroyed in
Question:
Lopez Manufacturing uses a standard cost accounting system. Some of the ledger accounts have been destroyed in a fire. The controller asks your help in reconstructing some missing entries and balances.
Instructions
Answer the following questions.
a. Materials Price Variance shows a €2,000 unfavorable balance. Accounts Payable shows €138,000 of raw materials purchases. What was the amount debited to Raw Materials Inventory for raw materials purchased?
b. Materials Quantity Variance shows a €3,000 favorable balance. Raw Materials Inventory shows a zero balance. What was the amount debited to Work in Process Inventory for direct materials used?
c. Labor Price Variance shows a €1,500 favorable balance. Factory Labor shows a debit of €145,000 for wages incurred. What was the amount credited to Factory Wages Payable?
d. Factory Labor shows a credit of €145,000 for direct labor used. Labor Quantity Variance shows a €900 favorable balance. What was the amount debited to Work in Process for direct labor used?
e. Overhead applied to Work in Process totaled €165,000. If the total overhead variance was €1,200 favorable, what was the amount of overhead costs debited to Manufacturing Overhead?
Accounts PayableAccounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Step by Step Answer:
a 136000 138000 2000 b ...View the full answer
Accounting Principles
ISBN: 978-1119419617
IFRS global edition
Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt
