Variances and Journal Entries Kent Company manufactures a single product and uses a standard costing system. The nature of its product dictates that it be sold in the period it is produced. Thus, no ending work in process or finished goods inventories remain at the end of the period. However, raw materials can be stored and are purchased in bulk when prices are favorable. Per-unit, standard product costs are material, $6 (0.5 pound); labor, $15 (1.5 hours); and variable overhead, $3 (based on direct labor hours). Budgeted fixed overhead is $96,000. Kent Company accounts for all inventories and cost of goods sold at standard cost and records each variance in a separate account. The following data relate to June, 2019 when 7,800 finished units were produced.

a. Assume Kent purchased 4,500 pounds of raw materials on account at $11.60 per pound and used 4,200 pounds in Junes production, prepare a journal entry to record the purchase of raw materials and a separate journal entry to record the use of raw materials in production. Record these entries using standard costs and include the appropriate materials variances.

General Journal
Description		Debit	Credit
Accounts payableLabor efficiency varianceMaterials efficiency varianceMaterials inventoryVariable overhead efficiency varianceVariable overheadspending varianceWages payable
Materials price variance
Accounts payableLabor efficiency varianceLabor rate varianceMaterials efficiency varianceMaterials inventoryVariable overhead efficiency varianceVariable overheadspending varianceWages payable
To record the purchase of direct materials
Work in process inventory
Accounts payableLabor efficiency varianceLabor rate varianceMaterials efficiency varianceMaterials inventoryVariable overhead efficiency varianceWork in process inventory
Accounts payableLabor efficiency varianceLabor rate varianceMaterials efficiency varianceMaterials inventoryVariable overhead efficiency varianceVariable overheadspending varianceWages payable
To record the use of direct materials

b. Assuming Kents employees worked 12,000 direct labor hours at an average hourly rate of $10.50, prepare a journal entry to record actual costs, standard costs, and any labor variances.

General Journal
Description		Debit	Credit
Work in process inventory
Accounts payableLabor efficiency varianceLabor rate varianceMaterials efficiency varianceMaterials inventoryVariable overhead efficiency varianceVariable overheadspending varianceWages payable
Labor efficiency variance
Accounts payableLabor efficiency varianceLabor rate varianceMaterials efficiency varianceMaterials inventoryVariable overhead efficiency varianceVariable overheadspending varianceWages payable
To record direct labor costs

c. Assuming Kents actual and applied variable overhead was $23,100 and that budgeted and actual fixed overhead incurred was $96,000, prepare a journal entry to record actual and standard overhead costs and any overhead variances.

General Journal
Description		Debit	Credit
Work in process inventory
Accounts payableLabor efficiency varianceLabor rate varianceMaterials efficiency varianceMaterials inventoryVariable overhead efficiency varianceVariable overheadspending varianceWages payable
Accounts payableLabor efficiency varianceLabor rate varianceMaterials efficiency varianceMaterials inventoryVariable overhead efficiency varianceVariable overheadspending varianceWages payable
Manufacturing overhead
To record actual and standard overhead costs