Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Post Parts manufactures components used in audio and video systems. The year just ended was Post's first year of operations and they are preparing financial

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Post Parts manufactures components used in audio and video systems. The year just ended was Post's first year of operations and they are preparing financial statements. The immediate issue facing Post is the treatment of the direct labor costs. Post set a standard at the beginning of the year that allowed 0.25 hours of direct labor for each unit of output. The standard rate for direct labor is $74 per hour. During the year, the company produced 282.000 units. A count of the ending finished goods inventory showed 16,920 units remaining in the warehouse. There are never any work-in-process inventories at Post. Post used 69.020 hours of labor. Total direct labor costs for the year amounted to $5,252,250. Required: a. ond b. What was the direct labor price variance and the direct labor efficiency variance for the year? c. Assume Post writes off all variances to Cost of Goods Sold. Prepare the entries Cook would make to record and ciose out the variances. d. Assume Post prorates all variances to the appropriate accounts. Prepare the entries Post would make to record and close out the variances, Complete this question by entering your answers in the tabs below. What was the direct labor price variance and the direct labor efficiency variance for the year? Note: Indicate the effect of each varlance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not selact either option. Journal entry worksheet Record the purchase and use of 69,020 hours of direct labor at an actual cost of $5,252,250 and the transfer to work in process at a standard cost of $74 per hour. Note: Enter debits before credits. Journal entry worksheet Record the closure of direct labor cost variances to cost of Goods Sold. Note: Enter debits before credits. Journal entry worksheet Record the purchase and use of 69,020 hours of direct labor at an actual cost of $5,252,250 and the transfer to work in process at a standard cost of $74 per hour. Note: Enter debits before credits. Journal entry worksheet Record the closure of direct labor cost variances. Note: Enter debits before credits

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions