Prepare journal entries for the following:

a$.$ The purchase of direct materials

b$.$ The issuance of direct materials to production $($Work in Process$)$

c$.$ The addition of direct labor to Work in Process

d$.$ The addition of overhead to Work in Process

e$.$ The incurrence of actual overhead costs

If an amount box does not require an entry, leave it blank.

a$.$ Materials

Direct Materials Price Variance

b$.$ Work in Process

c$.$ Work in Process

d$.$

Variable Overhead Control

Fixed Overhead Control

e$.$

Variable Overhead Control

$119,250$

$159,000$

$[2,005],[119,250],[159,000]$

$283,800$

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: e$.$

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:

Second, recognize the overhead variances:

If an amount box does not require an entry, leave it blank.

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.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:

Algers computes its overhead rates using practical volume, which is $54,000$ units. The actual results for the year are as follows:

a$.$ Units produced: $53,000$

b$.$ Direct materials purchased: $274,000$ pounds at $$2\mathrm{.}50$ per pound

c$.$ Direct materials used: $270,400$ pounds

d$.$ Direct labor: $40,100$ hours at $$17\mathrm{.}95$ per hour

e$.$ Fixed overhead: $$161,700$

f$.$ Variable overhead: $$122,100$

Required:

Compute price and usage variances for direct materials.

Compute the direct labor rate and labor efficiency variances.

Compute the fixed overhead spending and volume variances.

Spending Variance

$$

Volume Variance

Unfavorable

Compute the variable overhead spending and efficiency variances.

Spending Variance

$

$

Unfavorable

Efficiency Variance

:

$!$

Unfavorable