Case $10-49$ Direct$-$Material and Direct$-$Labor Variances; Job$-$Order Costing; Journal Entries $($Appendix$)($LO $10-1,10-3,10-6,10-9)$

European Styles, Inc., manufactures women$$s blouses of one quality, which are produced in lots to fill each special order. Its customers are department stores in various cities. European Styles sews the particular stores$$ labels on the blouses. During November, the company worked on three orders, for which the month$$s job$-$cost records disclose the following data.

Lot Number Boxes in Lot Material Used $($yards$)$ Hours Worked

$221,10025,4003,260$

$231,80040,9805,440$

$241,30029,9352,750$

The following additional information is available:

The firm purchased $98,000$ yards of material during November at a cost of $$119,700.$

Direct labor during November amounted to $$148,850.$ According to payroll records, production employees were paid $$13\mathrm{.}00$ per hour.

There was no work in process on November $1.$ During November, lots $22$ and $23$ were completed. All material was issued for lot $24,$ which was $70$ percent completed as to direct labor.

The standard costs for a box of six blouses are as follows:

Direct material $23$ yards at $$1\mathrm{.}20$ per yard $$27\mathrm{.}60$

Direct labor $3$ hours at $$12\mathrm{.}50$ per hr$.$ $$37\mathrm{.}50$

Production overhead $3$ hours at $$9\mathrm{.}00$ per hr$.$ $$27\mathrm{.}00$

Standard cost per box $$92\mathrm{.}10$

$1$

$1.$ Prepare a schedule computing the standard cost of lots $22,23,$ and $24$ for November. $($Round "Standard Cost per Box" to $2$ decimal places.$)$

standard cost of production

For November

Lot Quantity $($boxes$)$ Standard Cost per Box Total Standard Cost

$221,100$ $$92\mathrm{.}10$ $$101,310\mathrm{.}00$

$231,800$ $$92\mathrm{.}10$ $$165,780\mathrm{.}00$

$241,300$ $$92\mathrm{.}10$ $$119,730\mathrm{.}00$

Standard cost of production

$2.$ For each lot produced during November, complete the following schedules:

a Direct$-$material purchase price variance.

b Direct$-$material quantity variance.

c Direct$-$labor efficiency variance.

d Direct$-$labor rate variance.

$2$a

For each lot produced in November, complete the following schedule for the direct$-$material purchase price variance. $($Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter $"0"$ for no effect $($i$.$e$.,$ zero variance$).)$

Direct$-$Material Purchase Price Variance

For November

Actual cost of materials purchased

Standard cost of materials purchased

Direct$-$material purchase price variance

Direct$-$Material Quantity Variances

For November

lot no

Standard yards: $222324$ Total

Boxes in lot $1,1001,8001,3004,200$

Standard yards per box

Total standard quantity

Actual yards used

Variance in yards

Standard price

Direct$-$material quantity variance

$2$c

direct labor efficiency variances

lot no $222324$ Total

stanadrd hours

boxes in lot $11018001300$

stanadard hours per box

total

percentage of completion

total standard hours

actual hours worked

variance in hours

standard rate

direct labor efficiency variances

$2$d

direct labor rate variances

lot no $222324$ Total

direct labor rate variance

actual hours worked

rate paid in excess of standard