12 13 Question 5 The following standard costs per unit, of one product, have been taken from the records of Bahrain Company Direct materials 4 kgs at $6 per kg Direct labor 2 hours at $20 per hour Actual data for last month. Units produced: 20,000 Direct materials used: 70,000 kgs Direct labor hours: 44,000 Direct labor rate per hour: $18 Direct material price: $8 per kg Direct materials purchased: 200,000 kgs Required: (a) Compute the price and efficiency variances for direct materials and direct labor Direct material price variance to be calculated at the time of purchase. (b) Prepare the journal entries to record the price and efficiency variances for direct materials and direct labor. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). V Y EY 2 Ix0 10pt AV BIVS Paragraph v Arial
12 13 Question 5 The following standard costs per unit, of one product, have been taken from the records of Bahrain Company Direct materials 4 kgs at $6 per kg Direct labor 2 hours at $20 per hour Actual data for last month. Units produced: 20,000 Direct materials used: 70,000 kgs Direct labor hours: 44,000 Direct labor rate per hour: $18 Direct material price: $8 per kg Direct materials purchased: 200,000 kgs Required: (a) Compute the price and efficiency variances for direct materials and direct labor Direct material price variance to be calculated at the time of purchase. (b) Prepare the journal entries to record the price and efficiency variances for direct materials and direct labor. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). V Y EY 2 Ix0 10pt AV BIVS Paragraph v Arial
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
![11 12 13
Question 5
The following standard costs per unit, of one product, have been taken from the records of Bahrain Company:
Direct materials 4 kgs at $6 per kg
Direct labor
2 hours at $20 per hour
Actual data for last month.
Units produced:
20,000
Direct labor hours: 44,000
Direct labor rate per hour: $18
Direct materials used: 70,000 kgs
Direct material price: $8 per kg
Direct materials purchased: 200,000 kgs
Required:
(a) Compute the price and efficiency variances for direct materials and direct labor. Direct material price variance to be calculated at the time of purchase.
(b) Prepare the journal entries to record the price and efficiency variances for direct materials and direct labor
For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).
M
BIUS
Paragraph
V
Arial
V
V
10pt
EV AV
X² X₂G¶¶
V ✓
홍콩
380 तं (0)
2
-
199
A
88
L
A
FR](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe5527d56-2994-4551-a85e-1009e5da3c74%2F57658ea8-04c9-4b66-8fb8-11265858dbe2%2Fkierqj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:11 12 13
Question 5
The following standard costs per unit, of one product, have been taken from the records of Bahrain Company:
Direct materials 4 kgs at $6 per kg
Direct labor
2 hours at $20 per hour
Actual data for last month.
Units produced:
20,000
Direct labor hours: 44,000
Direct labor rate per hour: $18
Direct materials used: 70,000 kgs
Direct material price: $8 per kg
Direct materials purchased: 200,000 kgs
Required:
(a) Compute the price and efficiency variances for direct materials and direct labor. Direct material price variance to be calculated at the time of purchase.
(b) Prepare the journal entries to record the price and efficiency variances for direct materials and direct labor
For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).
M
BIUS
Paragraph
V
Arial
V
V
10pt
EV AV
X² X₂G¶¶
V ✓
홍콩
380 तं (0)
2
-
199
A
88
L
A
FR
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