DM variances; journal entries Skip Company produces a product called Lem. The standard direct material cost to produce one unit of Lem is four quarts of raw material at $2.50 per quart. During May, 4,200 quarts of raw material were purchased at a cost of $10,080. All the purchased material was used to produce 1,000 units of Lem. a. Compute the material price variance and material quantity variance for May. Note: Do not use a negative sign with your answers. Material price variance $ Material quantity variance $ 0 0 b. Assume the same facts except that Skip Company purchased 6,000 quarts of material at the previously calculated cost per quart, but used only 4,200 quarts. Compute the material price variance and material quantity variance for May, assuming that Skip identifies variances at the earliest possible time. Note: Do not use a negative sign with your answers. Material price variance $ Material quantity variance $ 0 0 c. Prepare the journal entries to record the material price and usage variances calculated in (b). Note: List any multiple debits or any multiple credits in alphabetical order by account name. Account Debit Credit ÷ 0 0 ÷ 0 0 ÷ 0 0 To record material price variance ÷ ÷ ÷ To record material quantity variance 0 0 0 Ooo 000
DM variances; journal entries Skip Company produces a product called Lem. The standard direct material cost to produce one unit of Lem is four quarts of raw material at $2.50 per quart. During May, 4,200 quarts of raw material were purchased at a cost of $10,080. All the purchased material was used to produce 1,000 units of Lem. a. Compute the material price variance and material quantity variance for May. Note: Do not use a negative sign with your answers. Material price variance $ Material quantity variance $ 0 0 b. Assume the same facts except that Skip Company purchased 6,000 quarts of material at the previously calculated cost per quart, but used only 4,200 quarts. Compute the material price variance and material quantity variance for May, assuming that Skip identifies variances at the earliest possible time. Note: Do not use a negative sign with your answers. Material price variance $ Material quantity variance $ 0 0 c. Prepare the journal entries to record the material price and usage variances calculated in (b). Note: List any multiple debits or any multiple credits in alphabetical order by account name. Account Debit Credit ÷ 0 0 ÷ 0 0 ÷ 0 0 To record material price variance ÷ ÷ ÷ To record material quantity variance 0 0 0 Ooo 000
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 4P: Calculation of materials and labor variances
Fritz Corp. manufactures and sells a single product....
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Transcribed Image Text:DM variances; journal entries
Skip Company produces a product called Lem. The standard direct material cost to produce one unit of Lem is four quarts of raw material at $2.50 per quart. During May, 4,200 quarts of raw
material were purchased at a cost of $10,080. All the purchased material was used to produce 1,000 units of Lem.
a. Compute the material price variance and material quantity variance for May.
Note: Do not use a negative sign with your answers.
Material price variance
$
Material quantity variance $
0
0
b. Assume the same facts except that Skip Company purchased 6,000 quarts of material at the previously calculated cost per quart, but used only 4,200 quarts. Compute the material price
variance and material quantity variance for May, assuming that Skip identifies variances at the earliest possible time.
Note: Do not use a negative sign with your answers.
Material price variance
$
Material quantity variance $
0
0
c. Prepare the journal entries to record the material price and usage variances calculated in (b).
Note: List any multiple debits or any multiple credits in alphabetical order by account name.
Account
Debit
Credit
÷
0
0
÷
0
0
÷
0
0
To record material price variance
÷
÷
÷
To record material quantity variance
0
0
0
Ooo
000
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