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Jim Graham Integrated Services uses a standard cost system, and calculates and records variances related to direct materials and direct labor. The following information was
Jim Graham Integrated Services uses a standard cost system, and calculates and records variances related to direct materials and direct labor. The following information was available for March: | |||||
Purchases of raw materials - actual cost | $ 100,000 | ||||
Purchases of raw materials - standard cost | 105,000 | ||||
All of the purchased raw material was transferred to work in process. The materials quantity variance was unfavorable by $10,000. | |||||
Direct labor - actual cost | $ 135,000 | ||||
Direct labor - standard cost for output | 132,500 | ||||
The labor efficiency variance was favorable by $7,500. | |||||
(a) | Prepare the journal entry that is needed to record the purchase of raw materials at standard price, and the related variance. | ||||
(b) | Prepare the journal entry that is needed to record the transfer of raw materials to production at standard usage rates, and the related unfavorable quantity variance. | ||||
(c) | Prepare the journal entry that is needed to record the increase in work in process for the standard direct labor costs, and record the related rate and efficiency variances. |
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