Direct Materials, Direct Labor, and Overhead Variances, Journal Entries

Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cost sheet:

Direct materials (5 lbs. @ $2.60)	$13.00
Direct labor (0.75 hr. @ $18.00)	13.50
Fixed overhead (0.75 hr. @ $4.00)	3.00
Variable overhead (0.75 hr. @ $3.00)	2.25
Standard cost per unit	$31.75

Algers computes its overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows:

1. Units produced: 53,000
2. Direct materials purchased: 273,000 pounds at $2.50 per pound
3. Direct materials used: 270,300 pounds
4. Direct labor: 40,100 hours at $17.95 per hour
5. Fixed overhead: $161,700
6. Variable overhead: $122,000

Required:

1. Compute price and usage variances for direct materials.

MPV	$fill in the blank 9afca2f45057019_1
MUV	$fill in the blank 9afca2f45057019_3

2. Compute the direct labor rate and labor efficiency variances.

Labor Rate Variance	$fill in the blank 9afca2f45057019_5
Labor Efficiency Variance	$fill in the blank 9afca2f45057019_7

3. Compute the fixed overhead spending and volume variances.

Spending Variance	$fill in the blank 9afca2f45057019_9
Volume Variance	$fill in the blank 9afca2f45057019_11

4. Compute the variable overhead spending and efficiency variances.

Spending Variance	$fill in the blank 9afca2f45057019_13
Efficiency Variance	$fill in the blank 9afca2f45057019_15

5. Prepare journal entries for the following:

1. The purchase of direct materials
2. The issuance of direct materials to production (Work in Process)
3. The addition of direct labor to Work in Process
4. The addition of overhead to Work in Process
5. The incurrence of actual overhead costs

If an amount box does not require an entry, leave it blank.

a.		fill in the blank 73a8b8f8bf96fa8_2	fill in the blank 73a8b8f8bf96fa8_3
		fill in the blank 73a8b8f8bf96fa8_5	fill in the blank 73a8b8f8bf96fa8_6
		fill in the blank 73a8b8f8bf96fa8_8	fill in the blank 73a8b8f8bf96fa8_9
b.		fill in the blank 73a8b8f8bf96fa8_11	fill in the blank 73a8b8f8bf96fa8_12
		fill in the blank 73a8b8f8bf96fa8_14	fill in the blank 73a8b8f8bf96fa8_15
		fill in the blank 73a8b8f8bf96fa8_17	fill in the blank 73a8b8f8bf96fa8_18
c.		fill in the blank 73a8b8f8bf96fa8_20	fill in the blank 73a8b8f8bf96fa8_21
		fill in the blank 73a8b8f8bf96fa8_23	fill in the blank 73a8b8f8bf96fa8_24
		fill in the blank 73a8b8f8bf96fa8_26	fill in the blank 73a8b8f8bf96fa8_27
		fill in the blank 73a8b8f8bf96fa8_29	fill in the blank 73a8b8f8bf96fa8_30
d.		fill in the blank 73a8b8f8bf96fa8_32	fill in the blank 73a8b8f8bf96fa8_33
		fill in the blank 73a8b8f8bf96fa8_35	fill in the blank 73a8b8f8bf96fa8_36
		fill in the blank 73a8b8f8bf96fa8_38	fill in the blank 73a8b8f8bf96fa8_39
e.		fill in the blank 73a8b8f8bf96fa8_41	fill in the blank 73a8b8f8bf96fa8_42
		fill in the blank 73a8b8f8bf96fa8_44	fill in the blank 73a8b8f8bf96fa8_45
		fill in the blank 73a8b8f8bf96fa8_47	fill in the blank 73a8b8f8bf96fa8_48

f. Prepare journal entries for the closing out of variances to Cost of Goods Sold. If an amount box does not require an entry, leave it blank.

First, close direct materials and direct labor variances:

		fill in the blank e69d01028053f7f_2	fill in the blank e69d01028053f7f_3
		fill in the blank e69d01028053f7f_5	fill in the blank e69d01028053f7f_6
		fill in the blank e69d01028053f7f_8	fill in the blank e69d01028053f7f_9
		fill in the blank e69d01028053f7f_11	fill in the blank e69d01028053f7f_12
		fill in the blank e69d01028053f7f_14	fill in the blank e69d01028053f7f_15

Second, recognize the overhead variances: If an amount box does not require an entry, leave it blank.

		fill in the blank 94f59000ffa7f86_2	fill in the blank 94f59000ffa7f86_3
		fill in the blank 94f59000ffa7f86_5	fill in the blank 94f59000ffa7f86_6
		fill in the blank 94f59000ffa7f86_8	fill in the blank 94f59000ffa7f86_9
		fill in the blank 94f59000ffa7f86_11	fill in the blank 94f59000ffa7f86_12
		fill in the blank 94f59000ffa7f86_14	fill in the blank 94f59000ffa7f86_15
		fill in the blank 94f59000ffa7f86_17	fill in the blank 94f59000ffa7f86_18

Third, close the overhead variances: Note: Close the variances with a debit balance first. For compound entries, if an amount box does not require an entry, leave it blank.

		fill in the blank 57ff9f0a500c021_2	fill in the blank 57ff9f0a500c021_3
		fill in the blank 57ff9f0a500c021_5	fill in the blank 57ff9f0a500c021_6
		fill in the blank 57ff9f0a500c021_8	fill in the blank 57ff9f0a500c021_9
		fill in the blank 57ff9f0a500c021_11	fill in the blank 57ff9f0a500c021_12
		fill in the blank 57ff9f0a500c021_14