Dunn, Inc. is a privately held furniture manufacturer. For August 2017, Dunn had the following standards for one of its products, a wicker chair: (Click the icon to view the standards.) (Click the icon to view the costs and variances for actual production "option 1".) ..... (Click the icon to view the costs and variances under the assumptions "option 2".) Requirement Prepare journal entries and post them to T-accounts for the price and efficiency variances listed under the two options. Summarize how these journal entries differ from normal-costing entries. - Option 1. Prepare the journal entry for the direct materials price variance. (Record debits first, then credits. Exclude explana Journal Entry Date Accounts 1. (a) Direct Materials Control Direct Materials Price Variance Accounts Payable Control Debit Credit 21,660 380 22,040 Option 1 For August 2017, Dunn had the following costs and variances for actual production of 2,100 chairs, 3,800 square yards of input purchased and used: Option 1: Actual production - Option 2 The following variances are under the assumption that 6,300 square yards of materials were purchased, even though only 3,800 square yards were used. Suppose further that direct materials price variances are isolated and traced at the time of purchase to the purchasing department rather than to the production department. Now prepare the journal entry for direct materials efficiency variance. Date 1. (b) Journal Entry Accounts Work-in-Process Control Direct Materials Efficiency Variance Direct Materials Control Actual input Option 2: Increase in purchases Flexible Actual input Actual costs Budgeted price budget costs Flexible Direct materials $ 22,040 $ Direct manufacturing labor 10,098 21,660 $ 9,900 23,940 10,500 Direct materials: Purchasing $ Actual costs 36,540 $ Budgeted price budget costs Price variances Efficiency Production 35,910 21,660 $ 23,940 variances Direct materials $ 380 U $ 2,280 F 2,280 21,660 Direct manufacturing labor 198 U 600 F Direct materials $ Price variance 630 U Efficiency variance $ 2,280 F Debit Credit 23,940 Next, prepare the journal entry for direct manufacturing labor price and efficiency variances. Date 1. (c) Journal Entry Accounts Work-in-Process Control Direct Manufacturing Labor Price Variance Direct Manufacturing Labor Efficiency Variance Wages Payable Control Debit Credit Print Done Standard Costs and Usage Direct materials Direct manufacturing labor Standards per chair 2 square yards of input at $5.70 per square yard 0.5 hour of input at $10.00 per hour Print Done -