Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Direct Materials, Direct Labor, and Overhead Variances, Journal Entries Rand Company produces dry fertilizer. At the beginning of the year, Rand had the following standard

image text in transcribedimage text in transcribed

image text in transcribed

Direct Materials, Direct Labor, and Overhead Variances, Journal Entries 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 49,000 units. The actual results for the year are as follows: a. Units produced: 53,000 b. Direct materials purchased: 408,000 pounds at $1.32 per pound c. Direct materials used: 407,000 pounds d. Direct labor: 10,500 hours at $17.95 per hour e. Fixed overhead: $36,570 f. Variable overhead: $18,000 Required: 1. Compute price and usage variances for direct materials. MPV $ MUV \$ 2. Compute the direct labor rate and labor efficiency variances. Labor Rate Variance $ Labor Efficiency Variance $ 3. Compute the fixed overhead spending and volume variances. Spending Variance $ Volume Variance $ 4. Compute the variable overhead spending and efficiency variances. Spending Variance $ Efficiency Variance $ 5. 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 I it blank. First, close direct materials and direct labor variances: Second, recognize the overhead variances: Post amounts from highest to lowest. If an amount box does not require an entry, leave it blank. Third, close the overhead variances: Post amounts from highest to lowest. If an amount box does not require an entry, leave it blank. Direct Materials, Direct Labor, and Overhead Variances, Journal Entries 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 49,000 units. The actual results for the year are as follows: a. Units produced: 53,000 b. Direct materials purchased: 408,000 pounds at $1.32 per pound c. Direct materials used: 407,000 pounds d. Direct labor: 10,500 hours at $17.95 per hour e. Fixed overhead: $36,570 f. Variable overhead: $18,000 Required: 1. Compute price and usage variances for direct materials. MPV $ MUV \$ 2. Compute the direct labor rate and labor efficiency variances. Labor Rate Variance $ Labor Efficiency Variance $ 3. Compute the fixed overhead spending and volume variances. Spending Variance $ Volume Variance $ 4. Compute the variable overhead spending and efficiency variances. Spending Variance $ Efficiency Variance $ 5. 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 I it blank. First, close direct materials and direct labor variances: Second, recognize the overhead variances: Post amounts from highest to lowest. If an amount box does not require an entry, leave it blank. Third, close the overhead variances: Post amounts from highest to lowest. If an amount box does not require an entry, leave it blank

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Medical Audit In Primary Health Care

Authors: Martin Lawrence, Theo Schofield

1st Edition

0192622676, 978-0192622679

More Books

Students also viewed these Accounting questions

Question

Give yourself a pep talk before getting up to speak.

Answered: 1 week ago

Question

What is the preferred personality?

Answered: 1 week ago