European Styles, Inc., manufactures women's blouses of one quality, which are produced in lots to fill each special order. Its customers are department stores in various cities. European Styles sews the particular stores' labels on the blouses. During November, the company worked on three orders, for which the month's job-cost records disclose the following data. Lot Number Boxes in Lot 1,300 2,000 1,500 22 23 24 . Material Used (yards) 26,170 39,490 30,085 The following additional information is available: 1. The firm purchased 98,000 yards of material during November at a cost of $101,500. 2. Direct labor during November amounted to $342,380. According to payroll records, production employees were paid $19.00 per hour. Direct material Direct labor Production overhead Standard cost per box Case 10-49 Part 3 3. There was no work in process on November 1. During November, lots 22 and 23 were completed. All material was issued for lot 24, which was 80 percent completed as to direct labor. 4. The standard costs for a box of six blouses are as follows: Hours Worked 5,160 8,050 4,810 20 yards at 4 hours at 4 hours at $ 1.00 per yard $18.70 per hr. $14.00 per hr. $ 20.00 74.80 56.00 $150.80 3. Prepare journal entries to record each of the following events. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar amount.) . Purchase of material. • Incurrence of direct-labor cost. • Addition of direct-material and direct-labor cost to Work-in-Process Inventory. Recording of direct-material and direct-labor variances.
European Styles, Inc., manufactures women's blouses of one quality, which are produced in lots to fill each special order. Its customers are department stores in various cities. European Styles sews the particular stores' labels on the blouses. During November, the company worked on three orders, for which the month's job-cost records disclose the following data. Lot Number Boxes in Lot 1,300 2,000 1,500 22 23 24 . Material Used (yards) 26,170 39,490 30,085 The following additional information is available: 1. The firm purchased 98,000 yards of material during November at a cost of $101,500. 2. Direct labor during November amounted to $342,380. According to payroll records, production employees were paid $19.00 per hour. Direct material Direct labor Production overhead Standard cost per box Case 10-49 Part 3 3. There was no work in process on November 1. During November, lots 22 and 23 were completed. All material was issued for lot 24, which was 80 percent completed as to direct labor. 4. The standard costs for a box of six blouses are as follows: Hours Worked 5,160 8,050 4,810 20 yards at 4 hours at 4 hours at $ 1.00 per yard $18.70 per hr. $14.00 per hr. $ 20.00 74.80 56.00 $150.80 3. Prepare journal entries to record each of the following events. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar amount.) . Purchase of material. • Incurrence of direct-labor cost. • Addition of direct-material and direct-labor cost to Work-in-Process Inventory. Recording of direct-material and direct-labor variances.
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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European Styles, Inc., manufactures women's blouses of one quality, which are produced in lots to fill each special order.
Its customers are department stores in various cities. European Styles sews the particular stores' labels on the blouses.
During November, the company worked on three orders, for which the month's job-cost records disclose the following
data.
.
Lot Number Boxes in Lot
1,300
2,000
1,500
.
22
23
24
Case 10-49 Part 3
The following additional information is available:
1. The firm purchased 98,000 yards of material during November at a cost of $101,500.
2. Direct labor during November amounted to $342,380. According to payroll records, production employees were paid
$19.00 per hour.
Direct material
Direct labor
Material Used (yards)
26,170
39,490
30,085
3. There was no work in process on November 1. During November, lots 22 and 23 were completed. All material was
issued for lot 24, which was 80 percent completed as to direct labor.
4. The standard costs for a box of six blouses are as follows:
Production overhead
Standard cost per box
Hours Worked
5,160
8,050
4,810
20 yards at
4 hours at
4 hours at
3. Prepare journal entries to record each of the following events. (If no entry is required for a transaction/event, select "No journal
entry required" in the first account field. Round your final answers to the nearest whole dollar amount.)
$1.00 per yard
$18.70 per hr.
$14.00 per hr.
$ 20.00
74.80
56.00
$150.80
Purchase of material.
Incurrence of direct-labor cost.
Addition of direct-material and direct-labor cost to Work-in-Process Inventory.
Recording of direct-material and direct-labor variances.
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