DM & DL variances Green Tee produces 100 percent cotton t-shirts, with the following standard direct material and labor quantities and costs:

Direct material	2.0 yards $3.00
Direct labor	0.7 hour x $7.50

Actual September production and costs for the company to produce 10,000 t-shirts were as follows:

	Quantity		Cost
Direct material
Purchased	30,000	yards	$89,700
Requisitioned into production	20,120	yards
Direct labor	7,940	hours	$58,756

a. What is the standard quantity of material and the standard labor time for Septembers production?

Standard quantity of material	20,000	yards
Standard quantity of labor	7,000	DLHs

b. Compute the direct material and direct labor variances.

Material price variance	Answer	AnswerFavorableUnfavorableNeither favorable or unfavorable
Material quantity variance	Answer	AnswerFavorableUnfavorableNeither favorable or unfavorable

Labor rate variance	Answer	AnswerFavorableUnfavorableNeither favorable or unfavorable
Labor efficiency variance	Answer	AnswerFavorableUnfavorableNeither favorable or unfavorable

c. Record the year-end adjusting entry to close the material and labor variances, assuming that they are insignificant.

Note: Record any multiple debits or any multiple credits in alphabetical order by account name.

Account	Debit	Credit
AnswerAccounts PayableCost of Good SoldLabor Efficiency VarianceLabor Rate VarianceMaterial Price VarianceMaterial Quantity VarianceOH Spending VarianceRaw Material InventoryVOH Efficiency VarianceVolume VarianceWages PayableWork in Process Inventory	Answer	Answer
AnswerAccounts PayableCost of Good SoldLabor Efficiency VarianceLabor Rate VarianceMaterial Price VarianceMaterial Quantity VarianceOH Spending VarianceRaw Material InventoryVOH Efficiency VarianceVolume VarianceWages PayableWork in Process Inventory	Answer	Answer
AnswerAccounts PayableCost of Good SoldLabor Efficiency VarianceLabor Rate VarianceMaterial Price VarianceMaterial Quantity VarianceOH Spending VarianceRaw Material InventoryVOH Efficiency VarianceVolume VarianceWages PayableWork in Process Inventory	Answer	Answer
To dispose of the material variances

Account	Debit	Credit
AnswerAccounts PayableCost of Good SoldLabor Efficiency VarianceLabor Rate VarianceMaterial Price VarianceMaterial Quantity VarianceOH Spending VarianceRaw Material InventoryVOH Efficiency VarianceVolume VarianceWages PayableWork in Process Inventory	Answer	Answer
AnswerAccounts PayableCost of Good SoldLabor Efficiency VarianceLabor Rate VarianceMaterial Price VarianceMaterial Quantity VarianceOH Spending VarianceRaw Material InventoryVOH Efficiency VarianceVolume VarianceWages PayableWork in Process Inventory	Answer	Answer
AnswerAccounts PayableCost of Good SoldLabor Efficiency VarianceLabor Rate VarianceMaterial Price VarianceMaterial Quantity VarianceOH Spending VarianceRaw Material InventoryVOH Efficiency VarianceVolume VarianceWages PayableWork in Process Inventory	Answer	Answer
To dispose of the labor variances