Apollo Company uses a standard cost system for manufacturing its single product, called Zoom. Company assigns factory overhead cost using predetermined overhead rates based on machine hours. The following data are available for current year: Standards per unit of product for planned production of 33,000 units: Budgeted machine hours Raw materials Direct labor Variable overhead Fixed overhead Actual units produced Actual price per pound of materials (A) WIP Inventory DM Quantity 66,000 hours Variance 4.40 pounds at $10.20 per pound 1.4 hours at $13.50 per hour 2 MH at $5.40 per machine hour 2 MH at $6.00 per machine hour 32,800 units Apollo used 137,760 pounds of raw materials for production of 32,800 units. Whic of the following journal entries should be used to record this transaction? $10.50 Debit 1,472,064 Credit 66,912
Apollo Company uses a standard cost system for manufacturing its single product, called Zoom. Company assigns factory overhead cost using predetermined overhead rates based on machine hours. The following data are available for current year: Standards per unit of product for planned production of 33,000 units: Budgeted machine hours Raw materials Direct labor Variable overhead Fixed overhead Actual units produced Actual price per pound of materials (A) WIP Inventory DM Quantity 66,000 hours Variance 4.40 pounds at $10.20 per pound 1.4 hours at $13.50 per hour 2 MH at $5.40 per machine hour 2 MH at $6.00 per machine hour 32,800 units Apollo used 137,760 pounds of raw materials for production of 32,800 units. Whic of the following journal entries should be used to record this transaction? $10.50 Debit 1,472,064 Credit 66,912
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:Apollo Company uses a standard cost system for manufacturing its single product,
called Zoom. Company assigns factory overhead cost using predetermined overhead
rates based on machine hours. The following data are available for current year:
Standards per unit of product for planned production of 33,000 units:
Budgeted machine hours
Raw materials
Direct labor
Variable overhead
Fixed overhead
Actual units produced
Actual price per pound of
materials
(A) WIP Inventory
DM Quantity
Variance
66,000 hours
RM Inventory
4.40 pounds at $10.20 per pound
1.4 hours at $13.50 per hour
2 MH at $5.40 per machine hour
2 MH at $6.00 per machine hour
Apollo used 137,760 pounds of raw materials for production of 32,800 units. Which
of the following journal entries should be used to record this transaction?
32,800 units
$10.50
Debit
1,472,064
Credit
66,912
1.405.152
Transcribed Image Text:Apollo used 137,760 pounds of raw materials for production of 32,800 units. Which
of the following journal entries should be used to record this transaction?
(A) WIP Inventory
DM Quantity
Variance
RM Inventory
(B) RM Inventory
DM Price Variance
WIP Inventory
(C) FG Inventory
DM Price Variance
RM Inventory
(D) DM Quantity Variance
WIP Inventory
RM Inventory
Debit Credit
1,472,064
1,405,152
66,912
1,472,064
66,912
1,379,568
66,912
1,405,152
1,472,064
45,000
1,427,064
1,446,480
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