In July, Zinger Corp. purchased 52,000 gallons of Numerol for $158,600 to use in the production of product #43MR7. During July, Zinger Corp. manufactured 10,140 units of product #43MR7. The following information is available about standard and actual quantities and costs: Standard for One Unit Direct material 4.8 gallons @ $3 per gallon Direct labor 20 minutes @ $9 per DLH Actual Usage for July Direct material 47,710 gallons Direct labor 3,354 DLHs @ $9.02 per DLH A. Prepare the journal entries for the material and labor variances. Note: Round amounts to the nearest whole dollar. Note: Record any multiple debits or any multiple credits in alphabetical order by account name. Account Debit Credit
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.
DM & DL variances;
In July, Zinger Corp. purchased 52,000 gallons of Numerol for $158,600 to use in the production of product #43MR7. During July, Zinger Corp. manufactured 10,140 units of product #43MR7. The following information is available about standard and actual quantities and costs:
Standard for One Unit
Direct material 4.8 gallons @ $3 per gallon
Direct labor 20 minutes @ $9 per DLH
Actual Usage for July
Direct material 47,710 gallons
Direct labor 3,354 DLHs @ $9.02 per DLH
A. Prepare the journal entries for the material and labor variances.
Note: Round amounts to the nearest whole dollar.
Note: Record any multiple debits or any multiple credits in alphabetical order by account name.
| Account | Debit | Credit |
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| To record material price variance | ||
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| To record material quantity variance | ||
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| To record labor variances |
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