Question
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
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:
- Units produced: 53,000
- Direct materials purchased: 274,000 pounds at $2.50 per pound
- Direct materials used: 270,300 pounds
- Direct labor: 40,100 hours at $17.95 per hour
- Fixed overhead: $161,600
- Variable overhead: $122,000
Required:
1. Compute price and usage variances for direct materials.
| MPV | $fill in the blank 63297df7007805b_1 | |
| MUV | $fill in the blank 63297df7007805b_3 |
2. Compute the direct labor rate and labor efficiency variances.
| Labor Rate Variance | $fill in the blank 63297df7007805b_5 | |
| Labor Efficiency Variance | $fill in the blank 63297df7007805b_7 |
3. Compute the fixed overhead spending and volume variances.
| Spending Variance | $fill in the blank 63297df7007805b_9 | |
| Volume Variance | $fill in the blank 63297df7007805b_11 |
4. Compute the variable overhead spending and efficiency variances.
| Spending Variance | $fill in the blank 63297df7007805b_13 | |
| Efficiency Variance | $fill in the blank 63297df7007805b_15 |
5. Prepare journal entries for the following:
- The purchase of direct materials
- The issuance of direct materials to production (Work in Process)
- The addition of direct labor to Work in Process
- The addition of overhead to Work in Process
- The incurrence of actual overhead costs
If an amount box does not require an entry, leave it blank.
| a. | fill in the blank 720ecafd9f8407e_2 | fill in the blank 720ecafd9f8407e_3 | |
| fill in the blank 720ecafd9f8407e_5 | fill in the blank 720ecafd9f8407e_6 | ||
| fill in the blank 720ecafd9f8407e_8 | fill in the blank 720ecafd9f8407e_9 | ||
| b. | fill in the blank 720ecafd9f8407e_11 | fill in the blank 720ecafd9f8407e_12 | |
| fill in the blank 720ecafd9f8407e_14 | fill in the blank 720ecafd9f8407e_15 | ||
| fill in the blank 720ecafd9f8407e_17 | fill in the blank 720ecafd9f8407e_18 | ||
| c. | fill in the blank 720ecafd9f8407e_20 | fill in the blank 720ecafd9f8407e_21 | |
| fill in the blank 720ecafd9f8407e_23 | fill in the blank 720ecafd9f8407e_24 | ||
| fill in the blank 720ecafd9f8407e_26 | fill in the blank 720ecafd9f8407e_27 | ||
| fill in the blank 720ecafd9f8407e_29 | fill in the blank 720ecafd9f8407e_30 | ||
| d. | fill in the blank 720ecafd9f8407e_32 | fill in the blank 720ecafd9f8407e_33 | |
| fill in the blank 720ecafd9f8407e_35 | fill in the blank 720ecafd9f8407e_36 | ||
| fill in the blank 720ecafd9f8407e_38 | fill in the blank 720ecafd9f8407e_39 | ||
| e. | fill in the blank 720ecafd9f8407e_41 | fill in the blank 720ecafd9f8407e_42 | |
| fill in the blank 720ecafd9f8407e_44 | fill in the blank 720ecafd9f8407e_45 | ||
| fill in the blank 720ecafd9f8407e_47 | fill in the blank 720ecafd9f8407e_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 ae96a9fcafd6fbe_2 | fill in the blank ae96a9fcafd6fbe_3 | ||
| fill in the blank ae96a9fcafd6fbe_5 | fill in the blank ae96a9fcafd6fbe_6 | ||
| fill in the blank ae96a9fcafd6fbe_8 | fill in the blank ae96a9fcafd6fbe_9 | ||
| fill in the blank ae96a9fcafd6fbe_11 | fill in the blank ae96a9fcafd6fbe_12 | ||
| fill in the blank ae96a9fcafd6fbe_14 | fill in the blank ae96a9fcafd6fbe_15 |
Second, recognize the overhead variances: If an amount box does not require an entry, leave it blank.
| fill in the blank 612416f94053f9e_2 | fill in the blank 612416f94053f9e_3 | ||
| fill in the blank 612416f94053f9e_5 | fill in the blank 612416f94053f9e_6 | ||
| fill in the blank 612416f94053f9e_8 | fill in the blank 612416f94053f9e_9 | ||
| fill in the blank 612416f94053f9e_11 | fill in the blank 612416f94053f9e_12 | ||
| fill in the blank 612416f94053f9e_14 | fill in the blank 612416f94053f9e_15 | ||
| fill in the blank 612416f94053f9e_17 | fill in the blank 612416f94053f9e_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 a97616fd5038fce_2 | fill in the blank a97616fd5038fce_3 | ||
| fill in the blank a97616fd5038fce_5 | fill in the blank a97616fd5038fce_6 | ||
| fill in the blank a97616fd5038fce_8 | fill in the blank a97616fd5038fce_9 | ||
| fill in the blank a97616fd5038fce_11 | fill in the blank a97616fd5038fce_12 | ||
| fill in the blank a97616fd5038fce_14 | |||
| fill in the blank a97616fd5038fce_16 |
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