Boss Company’s standard cost accounting system recorded this information from its December operations. Standard direct materials cost $100,000 Direct materials quantity variance (unfavorable) 3,000 Direct materials price variance (favorable) 500 Actual direct labor cost 90,000 Direct labor efficiency variance (favorable) . 7,000 Direct labor rate variance (unfavorable) 1,200 Actual overhead cost . 375,000 Volume variance (unfavorable) . 12,000 Controllable variance (unfavorable) . 9,000 Required 1. Prepare December 31 journal entries to record the company’s costs and variances for the month. (Do not prepare the journal entry to close the variances.) Analysis Component 2. If management investigates all variances above $5,000, which variances will management investigate?
Boss Company’s
Direct materials quantity variance (unfavorable) 3,000
Direct materials price variance (favorable) 500
Actual direct labor cost 90,000
Direct labor efficiency variance (favorable) . 7,000
Direct labor rate variance (unfavorable) 1,200
Actual
Volume variance (unfavorable) . 12,000
Controllable variance (unfavorable) . 9,000
Required
1. Prepare December 31 journal entries to record the company’s costs and variances for the month. (Do
not prepare the
Analysis Component
2. If management investigates all variances above $5,000, which variances will management investigate?
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