Direct Materials, Direct Labor, and Overhead Variances, Journal Entries Prepare journal entries for the following:

a$.$ The purchase of direct materials

b$.$ The issuance of direct materials to production $($Work in Process$)$

c$.$ The addition of direct labor to Work in Process

d$.$ The addition of overhead to Work in Process

e$.$ The incurrence of actual overhead costs

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

a$.$

b$.$

c$.!$

Direct Labor Efficiency Variance

Direct Labor Rate Variance

$$

Wages Payable $$

d$.$

Variable Overhead Control $$

Fixed Overhead Control $$

e$.$

Fixed Overhead Control $$ 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:

Second, recognize the overhead variances:

$$ Check My Work

Partially correct

Third, close the overhead variances:

Note: Close the variances with a debit balance first.

Fixed Overhead Volume Variance $$

Variable Overhead Spending Variance $$

Variable Overhead Efficiency Variance ${}_{?}$

Fixed Overhead Spending Variance

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

Overhead rates are computed using practical volume, which is $54,000$ units. The actual results for the year are as follows:

a$.$ Units produced: $53,000$

b$.$ Direct materials purchased: $265,000$ pounds @ $$2\mathrm{.}50$ per pound

c$.$ Direct materials used: $270,200$ pounds

d$.$ Direct labor: $40,100$ hours at $$17\mathrm{.}95$ per hour

e$.$ Fixed overhead: $$161,800$

f$.$ Variable overhead: $$122,100$

Required:

Compute price and usage variances for direct materials.

MPV $$

$$

Favorable

$$

MUV $$

Unfavorable $$

Compute the direct labor rate and labor efficiency variances.

Labor Rate Variance

$

$$

$$

Labor Efficiency Variance

$

$$

Compute the fixed overhead spending and volume variances.

Spending Variance

Volume Variance

$

$

$x$

$$