Direct Labor and Direct Materials Variances, Journal Entries Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels: Paper pulp (3 lbs. @ $0.40) $ 1.20 Labor (2 hrs. @ $12) 24.00 Total prime cost $25.20 During the first quarter of the year, Jameson produced 55,000 cases of paper towels. The company purchased and used 165,700 pounds of paper pulp at $0.37 per pound. Actual direct labor used was 111,000 hours at $12.10 per hour. Required: Instructions for parts 1 and 2: If a variance is zero, enter "0" and select "Not applicable"
Direct Labor and Direct Materials Variances, Journal Entries Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels: Paper pulp (3 lbs. @ $0.40) $ 1.20 Labor (2 hrs. @ $12) 24.00 Total prime cost $25.20 During the first quarter of the year, Jameson produced 55,000 cases of paper towels. The company purchased and used 165,700 pounds of paper pulp at $0.37 per pound. Actual direct labor used was 111,000 hours at $12.10 per hour. Required: Instructions for parts 1 and 2: If a variance is zero, enter "0" and select "Not applicable"
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Direct Labor and Direct Materials Variances,
Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels:
| Paper pulp (3 lbs. @ $0.40) | $ 1.20 | |
| Labor (2 hrs. @ $12) | 24.00 | |
| Total prime cost | $25.20 |
During the first quarter of the year, Jameson produced 55,000 cases of paper towels. The company purchased and used 165,700 pounds of paper pulp at $0.37 per pound. Actual direct labor used was 111,000 hours at $12.10 per hour.
Required:
Instructions for parts 1 and 2: If a variance is zero, enter "0" and select "Not applicable"
See screenshots
Transcribed Image Text:1. Calculate the direct materials price and usage variances.
Materials Price Variance
Materials Usage Variance
2. Calculate the direct labor rate and efficiency variances.
Labor Rate Variance
Labor Efficiency Variance
3. Prepare the journal entries for (1) the direct materials price variance, (2) the direct materials usage variance, and (3) the direct labor variances. If an amount box does not require an entry, leave it blank or enter "0".
1.
2.
3.
Transcribed Image Text:Direct Labor and Direct Materials Variances, Journal Entries
Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels:
Paper pulp (3 Ibs. @ $0.40)
$ 1.20
Labor (2 hrs. @ $12)
24.00
Total prime cost
$25.20
During the first quarter of the year, Jameson produced 55,000 cases of paper towels. The company purchased and used 165,700 pounds of paper pulp at $0.37 per pound. Actual direct labor used was 111,000 hours at $12.10
per hour.
Required:
Instructions for parts 1 and 2: If a variance is zero, enter "0" and select "Not applicable" from the drop down box.
1. Calculate the direct materials price and usage variances.
Materials Price Variance
Materials Usage Variance
2. Calculate the direct labor rate and efficiency variances.
Labor Rate Variance
Labor Efficiency Variance
3. Prepare the journal entries for (1) the direct materials price variance, (2) the direct materials usage variance, and (3) the direct labor variances. If an amount box does not require an entry, leave it blank or enter "0".
1.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education