Question
DM & DL variances; journal entries Madzingas Draperies manufactures curtains. Curtain #4571 requires the following: Direct material standard 10 square yards at $5 per yard
DM & DL variances; journal entries Madzingas Draperies manufactures curtains. Curtain #4571 requires the following:
Direct material standard | 10 | square yards at $5 per yard |
Direct labor standard | 5 | hours at $10 per hour |
During the second quarter, the company purchased 13,600 square yards at a cost of $66,640 and used 13,200 square yards to produce 1,200 Curtain #4571s. Direct labor totaled 6,080 hours for $63,840. a. Compute the material price and quantity variances. Note: Do not use a negative sign with your answers.
Material price variance | Answer | AnswerFavorableUnfavorableNeither favorable or unfavorable |
Material quantity variance | Answer | AnswerFavorableUnfavorableNeither favorable or unfavorable |
b. Prepare the journal entries for the purchase and use of direct material. Note: Round amounts to the nearest whole dollar. 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 record material price variance | ||
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 record material quantity variance |
c. Compute labor rate and labor efficiency variances. Note: Do not use a negative sign with your answers. Note: Round your final answer to the nearest whole dollar.
Labor rate variance | Answer | AnswerFavorableUnfavorableNeither favorable or unfavorable |
Labor efficiency variance | Answer | AnswerFavorableUnfavorableNeither favorable or unfavorable |
Total labor variance | Answer | AnswerFavorableUnfavorableNeither favorable or unfavorable |
d. Prepare the journal entry to accrue direct labor cost and record the labor variances for the quarter.
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 |
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 record labor variances |
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