Exercise 17-23 (Algo) Prorating Direct Materials Cost Variances (LO 17-1) Fischer Fabrication reported the following information concerning its direct materials: Direct materials purchased (actual) Standard cost of materials purchased Standard price times actual amount of materials used Actual production Standard direct materials costs per unit produced $ 369,900 $ 355,500 $ 327,500 55,700 units $6 Assume that Fischer Fabrication had no beginning finished goods inventory and only produced one product. A count of inventory showed that 4,456 units remained in the warehouse. Required: a. Assume Fischer writes off all variances to Cost of Goods Sold. Prepare the entries Fischer would make to record and close out the variances. b. Assume Fischer prorates all variances to the appropriate accounts. Prepare the entries Fischer would make to record and close out the variances.
Exercise 17-23 (Algo) Prorating Direct Materials Cost Variances (LO 17-1) Fischer Fabrication reported the following information concerning its direct materials: Direct materials purchased (actual) Standard cost of materials purchased Standard price times actual amount of materials used Actual production Standard direct materials costs per unit produced $ 369,900 $ 355,500 $ 327,500 55,700 units $6 Assume that Fischer Fabrication had no beginning finished goods inventory and only produced one product. A count of inventory showed that 4,456 units remained in the warehouse. Required: a. Assume Fischer writes off all variances to Cost of Goods Sold. Prepare the entries Fischer would make to record and close out the variances. b. Assume Fischer prorates all variances to the appropriate accounts. Prepare the entries Fischer would make to record and close out the variances.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 17-23 (Algo) Prorating Direct Materials Cost Variances (LO 17-1)
Fischer Fabrication reported the following information concerning its direct materials:
Direct materials purchased (actual)
Standard cost of materials purchased
Standard price times actual amount of materials used
Actual production
Standard direct materials costs per unit produced
$ 369,900
$ 355,500
$ 327,500
55,700 units
$6
Assume that Fischer Fabrication had no beginning finished goods inventory and only produced one product. A count of inventory
showed that 4,456 units remained in the warehouse.
Required:
a. Assume Fischer writes off all variances to Cost of Goods Sold. Prepare the entries Fischer would make to record and close out the
variances.
b. Assume Fischer prorates all variances to the appropriate accounts. Prepare the entries Fischer would make to record and close out
the variances.
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