Problem 14-49 (Algo) Standard Costs in Process Costing; All Variances and Journal Entries [LO 14-3, 14-5]

Dash Company adopted a standard costing system several years ago. The standard costs for the prime costs (i.e., direct materials and direct labor) of its single product are: Material (7 kilograms $5.00 per kilogram) $ 35.00 Labor (5 hours $17.60 per hour) 88.00 All materials are added at the beginning of processing. The following data were taken from the companys records for November: In-process beginning inventory None In-process ending inventory 750 units, 80% complete as to direct labor Units completed 7,100 units Budgeted output 7,500 units Purchases of materials 65,000 kilograms Total actual direct labor costs $ 590,000 Actual direct labor hours 37,400 hours Materials usage variance $ 3,000 Unfavorable Total materials variance $ 920 Unfavorable Required:

1. Compute for November:

a. The direct labor efficiency variance. Is this variance favorable (F) or unfavorable (U)?

b. The direct labor rate variance. Is this variance favorable (F) or unfavorable (U)?

c. The actual number of kilograms of material used in the production process during the month.

d. The actual price paid per kilogram of material during the month, the company calculates the direct materials price variance at point of purchase. e. The amount of direct materials cost and direct labor cost transferred to the Finished Goods Inventory account.

f. The total amount of direct materials cost and direct labor cost in the Work-in-Process Inventory account at the end of the month.

2. Prepare journal entries to record all transactions, including the variances in requirement 1.

2. Prepare journal entries to record all transactions, including the variances in requirement 1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

• Record the entry for the purchase of 65,000 kilograms of materials.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
1

Journal entry worksheet

• Record the entry for the issue of materials to production.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
2

Journal entry worksheet

• Record the entry for direct labor wages and standard direct labor cost incurred for manufacture.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
3