Requirement 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Root manufactures coffee mugs that it sells to other companies for customizing with their own logos. Root prepares Actual cost and production information for July 2018 follows: flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee A (Click the icon to view actual cost and production information.) mug is based on static budget volume of 59.900 coffee mugs per month: (Click the icon to view the cost data.) Read the requirements. - Direct materials cost variance Direct labor cost variance (AC-SC) XAQ (AC-SC) XAQ - $ = $ 800 F 5,970 U Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity: FOH = fixed overhead: SC = standard cost; SQ = standard quantity.) Formula = = Direct materials efficiency variance Direct labor efficiency variance (AQ - SQ) X SC (AQ - SQ) x SC $ $ Variance 630 1.120 F U Requirement 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances. (Record debits first, theri credits. Select the explanation on the last line of the journal entry table.) Begin by joumalizing the purchase of direct materials, including the related variance. (Prepare a single compound Joumal entry) Date Accounts and Explanation Debit Credit Jul. Choose from any list or enter any number in the input fields and then click Check Answer. Root manufactures coffee mugs that it sells to other companies for customizing with their own logos. Root prepares Actual cost and production information for July 2018 follows: flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffcoa (Click the icon to view actual cost and production information.) mug is based on static budget volume of 59.900 coffee mugs per month: (Click the icon to view the cost data.) Read the requirements. Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity: FOH = fixed overhead: SC = standard cost: SQ = standard quantity.) Variance = Formula (AC-SC) AQ (AC-SC) XAQ $ 800 Direct materials cost variance Direct labor cost variance F $ 5,970 u Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity: FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula = Direct materials efficiency variance Direct labor efficiency variance (AQ-SQ)X SC (AQ-SQ)X SC = $ = $ Variance 630 F 1,120 US Requirement 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin by journalizing the purchase of direct materials, including the related variance. (Prepare a single compound journal entry) Date Accounts and Explanation Debit Credit Choose from any list or enter any number in the input fields and then click Check Answer. 0 Data Table - X sells to other companies for customizing with their own logos. Root prepares Actual cost a ost system to control manufacturing costs. The standard unit cost of a coffee A (Click the of 59,900 coffee mugs per month: Read the reg efficiency variances for direct materials and direct labor. 0.05 0.30 le required formulas, compute the cost variances for direct materials and direct labor, and id overhead; SC = standard cost; SQ = standard quantity.) Direct Materials ( 0.2 lbs @ $ 0.25 per lb) $ Direct Labor (3 minutes @ $ 0.10 per minute) Manufacturing Overhead: Variable ( 3 minutes @ $ 0.04 per minute) $ 0.12 Fixed (3 minutes @ $ 0.13 per minute) _0. 0.39 $ Total Cost per Coffee Mug Formula Variance 0.51 0.86 * Requirements Print Done 1. Compute the cost and efficiency variances for direct materials and direct labor. 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances. 3. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. Journalize the actual manufacturing overhead and the allocated manufacturing overhead. Journalize the movement of all production costs from Work-in-Process Inventory. Journalize the adjusting of the Manufacturing Overhead account. 5. Root intentionally hired more highly skilled workers during July. How did this decision affect the cost variances? Overall, was the decision wise? a. There were no beginning or ending inventory balances. All expenditures were on account. b. Actual production and sales were 62,600 coffee mugs. c. Actual direct materials usage was 10,000 lbs. at an actual cost of $0.17 per lb. d. Actual direct labor usage was 199,000 minutes at a total cost of $25,870. e. Actual overhead cost was $4,975 variable and $35,925 fixed. f. Selling and administrative costs were $123,000. Print Done
