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 June's 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 Materials inventory 57,600 x Materials price variance 0 3,600 x Accounts payable 0 54,000 x To record the purchase of direct materials Work in process inventory 49,920 x Materials efficiency variance Materials inventory 3,840 x 0 53,760 x To record the use of direct materials b. Assuming Kent's 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 Work in process inventory Labor rate variance Labor efficiency variance Wages payable To record direct labor costs Debit Credit 120,120 x 7,600 x 3,080 x 0 0 130,800 x