Fischer Fabrication reported the following information concerning its direct materials: Direct materials purchased (actual) $ 365,000 Standard cost of materials purchased $ 352,000 Standard price times actual amount of materials used $ 324,000 Actual production 55,000 units Standard direct materials costs per unit produced $ 6 Assume that Fischer Fabrication had no beginning finished goods inventory and only produced one product. A count of inventory showed that 4,400 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.
Fischer Fabrication reported the following information concerning its direct materials: Direct materials purchased (actual) $ 365,000 Standard cost of materials purchased $ 352,000 Standard price times actual amount of materials used $ 324,000 Actual production 55,000 units Standard direct materials costs per unit produced $ 6 Assume that Fischer Fabrication had no beginning finished goods inventory and only produced one product. A count of inventory showed that 4,400 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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Question
Fischer Fabrication reported the following information concerning its direct materials:
| Direct materials purchased (actual) | $ 365,000 | |
|---|---|---|
| Standard cost of materials purchased | $ 352,000 | |
| Standard price times actual amount of materials used | $ 324,000 | |
| Actual production | 55,000 | units |
| Standard direct materials costs per unit produced | $ 6 |
Assume that Fischer Fabrication had no beginning finished goods inventory and only produced one product. A count of inventory showed that 4,400 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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