Question
[[[[[ Please answer #5 , I have resolved questions #1-4 ]]]]] Direct Materials, Direct Labor, and Overhead Variances, Journal Entries Algers Company produces dry fertilizer.
[[[[[ Please answer #5 , I have resolved questions #1-4 ]]]]]
Direct Materials, Direct Labor, and Overhead Variances, Journal Entries
Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cost sheet:
| Direct materials (5 lbs. @ $2.60) | $13.00 |
| Direct labor (0.75 hr. @ $18.00) | 13.50 |
| Fixed overhead (0.75 hr. @ $4.00) | 3.00 |
| Variable overhead (0.75 hr. @ $3.00) | 2.25 |
| Standard cost per unit | $31.75 |
Algers computes its overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows:
- Units produced: 53,000
- Direct materials purchased: 274,000 pounds at $2.50 per pound
- Direct materials used: 270,300 pounds
- Direct labor: 40,100 hours at $17.95 per hour
- Fixed overhead: $161,600
- Variable overhead: $122,000
Required:
1. Compute price and usage variances for direct materials.
| MPV | $fill in the blank 584973011025ffe_1 | Favorable |
| MUV | $fill in the blank 584973011025ffe_3 | Unfavorable |
2. Compute the direct labor rate and labor efficiency variances.
| Labor Rate Variance | $fill in the blank 584973011025ffe_5 | Favorable |
| Labor Efficiency Variance | $fill in the blank 584973011025ffe_7 | Unfavorable |
3. Compute the fixed overhead spending and volume variances.
| Spending Variance | $fill in the blank 584973011025ffe_9 | Favorable |
| Volume Variance | $fill in the blank 584973011025ffe_11 | Unfavorable |
4. Compute the variable overhead spending and efficiency variances.
| Spending Variance | $fill in the blank 584973011025ffe_13 | Unfavorable |
| Efficiency Variance | $fill in the blank 584973011025ffe_15 | Unfavorable |
5. Prepare journal entries for the following:
- The purchase of direct materials
- The issuance of direct materials to production (Work in Process)
- The addition of direct labor to Work in Process
- The addition of overhead to Work in Process
- The incurrence of actual overhead costs
If an amount box does not require an entry, leave it blank.
| a. | fill in the blank 6cfe46016008001_2 | fill in the blank 6cfe46016008001_3 | |
| fill in the blank 6cfe46016008001_5 | fill in the blank 6cfe46016008001_6 | ||
| fill in the blank 6cfe46016008001_8 | fill in the blank 6cfe46016008001_9 | ||
| b. | fill in the blank 6cfe46016008001_11 | fill in the blank 6cfe46016008001_12 | |
| fill in the blank 6cfe46016008001_14 | fill in the blank 6cfe46016008001_15 | ||
| fill in the blank 6cfe46016008001_17 | fill in the blank 6cfe46016008001_18 | ||
| c. | fill in the blank 6cfe46016008001_20 | fill in the blank 6cfe46016008001_21 | |
| fill in the blank 6cfe46016008001_23 | fill in the blank 6cfe46016008001_24 | ||
| fill in the blank 6cfe46016008001_26 | fill in the blank 6cfe46016008001_27 | ||
| fill in the blank 6cfe46016008001_29 | fill in the blank 6cfe46016008001_30 | ||
| d. | fill in the blank 6cfe46016008001_32 | fill in the blank 6cfe46016008001_33 | |
| fill in the blank 6cfe46016008001_35 | fill in the blank 6cfe46016008001_36 | ||
| fill in the blank 6cfe46016008001_38 | fill in the blank 6cfe46016008001_39 | ||
| e. | fill in the blank 6cfe46016008001_41 | fill in the blank 6cfe46016008001_42 | |
| fill in the blank 6cfe46016008001_44 | fill in the blank 6cfe46016008001_45 | ||
| fill in the blank 6cfe46016008001_47 | fill in the blank 6cfe46016008001_48 |
f. Prepare journal entries for the closing out of variances to Cost of Goods Sold. If an amount box does not require an entry, leave it blank.
First, close direct materials and direct labor variances:
| fill in the blank aef6f6ffef8dfe5_2 | fill in the blank aef6f6ffef8dfe5_3 | ||
| fill in the blank aef6f6ffef8dfe5_5 | fill in the blank aef6f6ffef8dfe5_6 | ||
| fill in the blank aef6f6ffef8dfe5_8 | fill in the blank aef6f6ffef8dfe5_9 | ||
| fill in the blank aef6f6ffef8dfe5_11 | fill in the blank aef6f6ffef8dfe5_12 | ||
| fill in the blank aef6f6ffef8dfe5_14 | fill in the blank aef6f6ffef8dfe5_15 |
Second, recognize the overhead variances: If an amount box does not require an entry, leave it blank.
| fill in the blank 54b3e8fceffdfdd_2 | fill in the blank 54b3e8fceffdfdd_3 | ||
| fill in the blank 54b3e8fceffdfdd_5 | fill in the blank 54b3e8fceffdfdd_6 | ||
| fill in the blank 54b3e8fceffdfdd_8 | fill in the blank 54b3e8fceffdfdd_9 | ||
| fill in the blank 54b3e8fceffdfdd_11 | fill in the blank 54b3e8fceffdfdd_12 | ||
| fill in the blank 54b3e8fceffdfdd_14 | fill in the blank 54b3e8fceffdfdd_15 | ||
| fill in the blank 54b3e8fceffdfdd_17 | fill in the blank 54b3e8fceffdfdd_18 |
Third, close the overhead variances: Note: Close the variances with a debit balance first. For compound entries, if an amount box does not require an entry, leave it blank.
| fill in the blank ad864ff92f9a078_2 | fill in the blank ad864ff92f9a078_3 | ||
| fill in the blank ad864ff92f9a078_5 | fill in the blank ad864ff92f9a078_6 | ||
| fill in the blank ad864ff92f9a078_8 | fill in the blank ad864ff92f9a078_9 | ||
| fill in the blank ad864ff92f9a078_11 | fill in the blank ad864ff92f9a078_12 | ||
| fill in the blank ad864ff92f9a078_14 | |||
| fill in the blank ad864ff92f9a078_16 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Advanced Financial Accounting
Authors: Thomas H. Beechy
5th Edition
0131236997, 9780131236998
