DL variances; journal entriesCalista & Lane, CPAs, set the following standard for its inventory audit of Triumph Co.: 350 hours at an average hourly rate of $250. The firm actually worked 330 hours during the inventoryaudit process. The total labor variance for the audit was $3,500 unfavorable.a. Compute the total actual payroll. $ 0b. Compute the labor efficiency variance.Note: Do not use a negative sign with your answer.Labor efficiency variance $ 0c. Compute the labor rate variance.Note: Do not use a negative sign with your answer.Labor rate variance $ 0÷d. Prepare the entry to assign labor costs to inventory, record the labor variances, and accrue payroll costs.Note: Record any multiple debits or any multiple credits in alphabetical order by account name.AccountDebitCredit÷00÷00÷00÷00To record labor variances

a. Compute the total actual payroll.Given:The firm actually worked 330 hours.The average hourly rate…

Answered: DL variances; journal entries Calista &…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 9DQ: At the end of the period, the factory overhead account has a credit balance of 10,000. (a) Is the...

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Calista & Lane, CPAs, set the following standard for its inventory audit of Triumph Co.: 560 hours at an average hourly rate of $250. The firm actually worked 528 hours during the inventory audit process. The total labor variance for the audit was $5,600 unfavorable. d. Prepare the entry to assign labor costs to inventory, record the labor variances, and accrue payroll costs. Account Debit Credit To record labor variances Previous answers for assistance: a. Compute the total actual payroll. $145,600 b. Compute the labor efficiency variance. $8,000 Favorable c. Compute the labor rate variance. $13,600 Unfavorable
Prepare an income statement (through income before income tax) for presentation to management, using the following data from the records of Greenway Manufacturing Company for November of the current year: Administrative expenses $73,500 Cost of goods sold (at standard) 470,000 Direct materials quantity variance—favorable 1,200 Direct materials price variance—favorable 2,400 Direct labor time variance—unfavorable 900 Direct labor rate variance—favorable 500 Factory overhead volume variance—unfavorable 10,000 Factory overhead controllable variance—favorable 1,500 Sales 950,000 Selling expenses 165,800 If an amount box does not require an entry, leave it blank. Greenway Manufacturing Company Income Statement For Month Ended November 30 Sales $fill in the blank 1 Cost of goods sold - at standard fill in the blank 2 Gross profit - at standard $fill in the blank 3 Less variances from standard cost: Favorable Unfavorable…
Using the following data from the records of Starts Inc. for November of the current year, prepare an income statement (through operating income) that includes variances for presentation to management: Administrative expenses $ 69,000 Cost of goods sold (at standard) 200,000 Direct materials quantity variance—favorable 4,000 Direct materials price variance—unfavorable 3,200 Direct labor time variance—unfavorable 1,600 Direct labor rate variance—favorable 1,500 Factory overhead volume variance—unfavorable 2,000 Factory overhead controllable variance—favorable 2,500 Sales 750,000 Selling expenses 245,000
For the current period, a company shows a $3,550 unfavorable controllable variance, a $1,950 favorable volume variance, and $210,000 of standard overhead applied. The company records standard costs in its accounts. Prepare the entry to record overhead applied to production and overhead variances. View transaction list Journal entry worksheet < A Record overhead applied to production and overhead variances. Note: Enter debits before credits Transaction 1 Record entry General Journal Clear entry Debit Credit View general journal
At the end of the period, the factory overhead account has a credit balance of 10,000. (a) Is the total factory cost variance favorable or unfavorable? (b) Are the controllable and volume variances favorable or unfavorable?
Potter Company has installed a JIT purchasing and manufacturing system and is using back-flush accounting for its cost flows. It currently uses a two-trigger approach with the purchase of materials as the first trigger point and the completion of goods as the second trigger point. During the month of June, Potter had the following transactions: There were no beginning or ending inventories. All goods produced were sold with a 60 percent markup. Any variance is closed to Cost of Goods Sold. (Variances are recognized monthly.) Required: 1. Prepare the journal entries that would have been made using a traditional accounting approach for cost flows. 2. Prepare the journal entries for the month using backflush costing.
Potter Company has installed a JIT purchasing and manufacturing system and is using back-flush accounting for its cost flows. It currently uses a two-trigger approach with the purchase of materials as the first trigger point and the completion of goods as the second trigger point. During the month of June, Potter had the following transactions: There were no beginning or ending inventories. All goods produced were sold with a 60 percent markup. Any variance is closed to Cost of Goods Sold. (Variances are recognized monthly.) Required: 1. Prepare the journal entries for the month of May using backflush costing, assuming that Potter uses the completion of goods as the only trigger point. 2. Prepare the journal entries for the month of May using backflush costing, assuming that Potter uses the sale of goods as the only trigger point.
Madison Company uses the following rule to determine whether direct labor efficiency variances ought to be investigated. A direct labor efficiency variance will be investigated anytime the amount exceeds the lesser of 12,000 or 10 percent of the standard labor cost. Reports for the past five weeks provided the following information: Required: 1. Using the rule provided, identify the cases that will be investigated. 2. Suppose that investigation reveals that the cause of an unfavorable direct labor efficiency variance is the use of lower quality direct materials than are usually used. Who is responsible? What corrective action would likely be taken? 3. Suppose that investigation reveals that the cause of a significant favorable direct labor efficiency variance is attributable to a new approach to manufacturing that takes less labor time but causes more direct materials waste. Upon examining the direct materials usage variance, it is discovered to be unfavorable, and it is larger than the favorable direct labor efficiency variance. Who is responsible? What action should be taken? How would your answer change if the unfavorable variance were smaller than the favorable?
[The following information applies to the questions displayed below.] The director of cost management for Odessa Company uses a statistical control chart to help management determine when to investigate variances. The critical value is 1 standard deviation. The company incurred the following direct-labor efficiency variances during the first six months of the current year. January February March. April May June $ 250 F 800 U 700 U 908 U 1,050 U 1,200 U The standard direct-labor cost during each of these months was $19,000. The controller has estimated that the firm's monthly direct-labor variances have a standard deviation of $950. Required: 1-a. Draw a statistical control chart and plot the variance data given above. 1-b. Which variances will be investigated?
Is this correct?
Yohan Company has the following balances in its direct materials and direct labor variance accounts at year-end: Direct Materials Price Debit Credit Variance $1,000 Direct Materials Quantity $2,000 Variance $500 Direct Labor Rate Variance $3,000 Direct Labor Efficiency Variance Unadjusted Cost of Goods Sold equals $200,000. Which of the following would be FALSE when the year-end closing entry is made? O The Cost of Goods Sold account will be debited. O Adjusted Cost of Goods Sold will be $198,500. The Direct Labor Rate Variance account will be debited. O The Direct Materials Price Variance account will be credited.
The director of cost management for Odessa Company uses a statistical control chart to help management determine when to investigate variances. The critical value is 1 standard deviation. The company incurred the following direct-labor efficiency variances during the first six months of the current year. January February March April May June $ 300 F 850 U 750 U 950 U 1,100 U 1,480 U The standard direct-labor cost during each of these months was $24,000. The controller has estimated that the firm's monthly direct- labor variances have a standard deviation of $1,000. Required: 2-a. Determine the cutoff value for investigation if the controller's rule of thumb is to investigate all variances equal to or greater than 6 percent of standard cost. 2-b. Based on the cutoff value, which month will have its direct-labor efficiency variance investigated? Complete this question by entering your answers in the tabs below. Req 2A Reg 2B Determine the cutoff value for investigation if the…

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