Bohon Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs. There is no variable manufacturing overhead. The standard cost card for the company's only product contains the following information concerning direct materials: Inputs Direct materials Standard Quantity or Hours 1.0 pounds Cost Standard Price or Standard Rate $ 5.50 per pound- $ 5.50 During the year, the company completed the following transactions concerning direct materials: a. Purchased 19,700 pounds of raw material at a price of $4.70 per pound. b. Used 18,500 pounds of the raw material to produce 18,400 units of work in process. The company calculated the following direct materials variances for the year: Materials price variance Materials quantity variance $ 15,760 F $ 550 U Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. Materials Materials Labor FOH Cash Raw Materials Work in Process Finished Goods 1/1 $ 1,030,000 $ 53,350 $ 0 $ 88,880 PP&E (net) $ 737,900 Price Variance $ 0 $ 0 $ 0 Quantity Labor Rate Efficiency Budget Variance Variance Variance Variance $ 0 V $ 0 a. b. When the purchase of raw materials is recorded in transaction (a) above, which of the following entries will be made?
Bohon Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs. There is no variable manufacturing overhead. The standard cost card for the company's only product contains the following information concerning direct materials: Inputs Direct materials Standard Quantity or Hours 1.0 pounds Cost Standard Price or Standard Rate $ 5.50 per pound- $ 5.50 During the year, the company completed the following transactions concerning direct materials: a. Purchased 19,700 pounds of raw material at a price of $4.70 per pound. b. Used 18,500 pounds of the raw material to produce 18,400 units of work in process. The company calculated the following direct materials variances for the year: Materials price variance Materials quantity variance $ 15,760 F $ 550 U Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation. Materials Materials Labor FOH Cash Raw Materials Work in Process Finished Goods 1/1 $ 1,030,000 $ 53,350 $ 0 $ 88,880 PP&E (net) $ 737,900 Price Variance $ 0 $ 0 $ 0 Quantity Labor Rate Efficiency Budget Variance Variance Variance Variance $ 0 V $ 0 a. b. When the purchase of raw materials is recorded in transaction (a) above, which of the following entries will be made?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Bohon Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard
cost system in which inventories are recorded at their standard costs. There is no variable manufacturing overhead. The standard cost card for the
company's only product contains the following information concerning direct materials:
Inputs
Direct materials
Standard Quantity
or Hours
1.0 pounds
Cost
Standard Price or
Standard
Rate
$ 5.50 per pound-
$ 5.50
During the year, the company completed the following transactions concerning direct materials:
a. Purchased 19,700 pounds of raw material at a price of $4.70 per pound.
b. Used 18,500 pounds of the raw material to produce 18,400 units of work in process.
The company calculated the following direct materials variances for the year:
Materials price variance
Materials quantity variance
$ 15,760 F
$ 550 U
Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided
into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and
Equipment net of depreciation.
Materials Materials
Labor
FOH
Cash
Raw
Materials
Work in
Process
Finished
Goods
1/1 $ 1,030,000 $ 53,350
$ 0
$ 88,880
PP&E (net)
$ 737,900
Price
Variance
$ 0
$ 0
$ 0
Quantity Labor Rate Efficiency Budget
Variance Variance
Variance
Variance
$ 0
V
$ 0
a.
b.
When the purchase of raw materials is recorded in transaction (a) above, which of the following entries will be made?
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