Wannabe Corporation makes a product with the following standard costs for direct materials and direct labour:
Direct materials: 1.90 metres at $6.70 per metre . . . . . . . . . . . . . . . . . . . . . . . . . . $12.73
Direct labour: 0.35 hours at $17.00 per hour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5.95
Materials purchased: 19,500 metres at $7.00 per metre . . . . . . . . . . . . . . . . . . . $136,500
Materials used in production: 17,400 metres . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -
Direct labour: 2,540 hours at $17.75 per hour . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 45,085
Materials price variance: 19,500 metres at $0.30 per metre U . . . . . . . . . . . . . $ 5,850 U
Materials quantity variance: 1,600 metres at $6.70 per metre F . . . . . . . . . . . . $10,720 F
Labour rate variance: 2,540 hours at $0.75 per hour U . . . . . . . . . . . . . . . . . . . $ 1,905 U
Labour efficiency variance: 960 hours at $17.00 per hour F . . . . . . . . . . . . . . . $16,320 F
During the most recent month, 10,000 units were produced. The costs associated with the month's production of this product were as follows:
The standard cost variances for direct materials and direct labour are as follows:
Required:
1. Prepare the journal entry to record the purchase of materials on account for the month.
2. Prepare the journal entry to record the use of materials for the month.
3. Prepare the journal entry to record the incurrence of direct labour cost for the month.