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Exercise 17-25 (Algo) Prorating Direct Materials Cost Variances (LO 17-1) The cost analyst for Sheffer Systems collected the following data concerning direct materials: 39,000 units Actual production Direct materials purchased (actual) Standard cost of materials purchased Standard direct materials costs per unit produced Standard price times actual amount of materials used $ 719,300 726,000 17 678,700 Assume that Sheffer Systems had no beginning finished goods or direct materials inventory and only produced one product. Sheffer sold 30,030 units during the period. Required: . Assume Sheffer writes off all variances to Cost of Goods Sold. Prepare the entries Sheffer would make to record and close out the wariances. b. Assume Sheffer prorates all variances to the appropriate accounts. Prepare the entries Sheffer would make to record and close out the variances.

Exercise 17-25 (Algo) Prorating Direct Materials Cost Variances (LO 17-1) The cost analyst for Sheffer Systems collected the following data concerning direct materials: 39,000 units Actual production Direct materials purchased (actual) Standard cost of materials purchased Standard direct materials costs per unit produced Standard price times actual amount of materials used $ 719,300 726,000 17 678,700 Assume that Sheffer Systems had no beginning finished goods or direct materials inventory and only produced one product. Sheffer sold 30,030 units during the period. Required: . Assume Sheffer writes off all variances to Cost of Goods Sold. Prepare the entries Sheffer would make to record and close out the wariances. b. Assume Sheffer prorates all variances to the appropriate accounts. Prepare the entries Sheffer would make to record and close out the variances.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 17-25 (Algo) Prorating Direct Materials Cost Variances (LO 17-1) The cost analyst for Sheffer Systems collected the following data concerning direct materials: Actual production 39,000 units Direct materials purchased (actual) Standard cost of materials purchased Standard direct materials costs per unit produced. Standard price times actual amount of materials used $ 719,300 726,000 17 678,700 Assume that Sheffer Systems had no beginning finished goods or direct materials inventory and only produced one product. Sheffer sold 30,030 units during the period. Required: a. Assume Sheffer writes off all variances to Cost of Goods Sold. Prepare the entries Sheffer would make to record and close out the variances. b. Assume Sheffer prorates all variances to the appropriate accounts. Prepare the entries Sheffer would make to record and close out the variances.
Transcribed Image Text:Exercise 17-25 (Algo) Prorating Direct Materials Cost Variances (LO 17-1) The cost analyst for Sheffer Systems collected the following data concerning direct materials: Actual production 39,000 units Direct materials purchased (actual) Standard cost of materials purchased Standard direct materials costs per unit produced. Standard price times actual amount of materials used $ 719,300 726,000 17 678,700 Assume that Sheffer Systems had no beginning finished goods or direct materials inventory and only produced one product. Sheffer sold 30,030 units during the period. Required: a. Assume Sheffer writes off all variances to Cost of Goods Sold. Prepare the entries Sheffer would make to record and close out the variances. b. Assume Sheffer prorates all variances to the appropriate accounts. Prepare the entries Sheffer would make to record and close out the variances.
Journal entry worksheet B C < Record the standard cost of materials used and the materials efficiency. variance. A Note: Enter debits before credits. Event 1 Record entry View transaction list < A Journal entry worksheet Event 2 Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Record entry General Journal B Note: Enter debits before credits. View transaction list C Record the cost of the direct materials purchased and the materials price. variance. Clear entry Event 3 Record entry General Journal Journal entry worksheet <A B с Note: Enter debits before credits. Clear entry Debit Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. General Journal Credit Debit Clear entry Record the closure of direct material cost variances to Cost of Goods Sold. View general Journal Debit Credit > Credit > View general Journal > View general Journal
Transcribed Image Text:Journal entry worksheet B C < Record the standard cost of materials used and the materials efficiency. variance. A Note: Enter debits before credits. Event 1 Record entry View transaction list < A Journal entry worksheet Event 2 Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Record entry General Journal B Note: Enter debits before credits. View transaction list C Record the cost of the direct materials purchased and the materials price. variance. Clear entry Event 3 Record entry General Journal Journal entry worksheet <A B с Note: Enter debits before credits. Clear entry Debit Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. General Journal Credit Debit Clear entry Record the closure of direct material cost variances to Cost of Goods Sold. View general Journal Debit Credit > Credit > View general Journal > View general Journal
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