Rankin Fabrication reports the following information with respect to its direct materials: 33,700 gallons Actual quantities of direct materials used Actual costs of direct materials used Standard price per unit of direct materials Flexible budget for direct materials Rankin Fabrication holds no materials inventories. $ 187,280 $ 5.61 $ 196,900 Required: a. Compute the direct material price and efficiency variances. b. (Appendix) Prepare the journal entries to record the purchase and use of the direct materials using standard costing. Complete this question by entering your answers in the tabs below. Required A Required B Compute the direct material price and efficiency variances. Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Direct materials price variance Direct materials efficiency variance
Rankin Fabrication reports the following information with respect to its direct materials: 33,700 gallons Actual quantities of direct materials used Actual costs of direct materials used Standard price per unit of direct materials Flexible budget for direct materials Rankin Fabrication holds no materials inventories. $ 187,280 $ 5.61 $ 196,900 Required: a. Compute the direct material price and efficiency variances. b. (Appendix) Prepare the journal entries to record the purchase and use of the direct materials using standard costing. Complete this question by entering your answers in the tabs below. Required A Required B Compute the direct material price and efficiency variances. Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Direct materials price variance Direct materials efficiency variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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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Transcribed Image Text:Rankin Fabrication reports the following information with respect to its direct materials:
Actual quantities of direct materials used
Actual costs of direct materials used
Standard price per unit of direct materials
Flexible budget for direct materials
Rankin Fabrication holds no materials inventories.
33,700 gallons
$ 187,280
$ 5.61
$196,900
Required:
a. Compute the direct material price and efficiency variances.
b. (Appendix) Prepare the journal entries to record the purchase and use of the direct materials using standard costing.
Complete this question by entering your answers in the tabs below.
Direct materials price variance
Direct materials efficiency variance
Required A Required B
Compute the direct material price and efficiency variances.
Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no
effect, do not select either option.
Transcribed Image Text:a. Compute the direct material price and efficiency variances.
b. (Appendix) Prepare the journal entries to record the purchase and use of the direct materials using standard costing.
Complete this question by entering your answers in the tabs below.
Required A Required B
(Appendix) Prepare the journal entries to record the purchase and use of the direct materials using standard costing.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
View transaction list
Journal entry worksheet
< A
Record the purchase and use of the direct materials using standard costing.
Note: Enter debits before credits.
Event
1
General Journal
Debit
Credit
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