Exercise 17-21 (Algo) Prorating Direct Labor Cost Variances (LO 17-1)Post Parts manufactures components used in audio and video systems. The year just ended was Post's first year of operations andthey are preparing financial statements. The immediate issue facing Post is the treatment of the direct labor costs. Post set a standardat the beginning of the year that allowed 0.25 hours of direct labor for each unit of output. The standard rate for direct labor is $70 perhour. During the year, the company produced 278,000 units. A count of the ending finished goods inventory showed 16,680 unitsremaining in the warehouse. There are never any work-in-process inventories at Post. Post used 67,830 hours of labor. Total directlabor costs for the year amounted to $4,893,350.Required:a. and b. What was the direct labor price variance and the direct labor efficiency variance for the year?c. Assume Post writes off all variances to Cost of Goods Sold. Prepare the entries Cook would make to record and close out thevariances.d. Assume Post prorates all variances to the appropriate accounts. Prepare the entries Post would make to record and close out thevariances.Complete this question by entering your answers in the tabs below.Req A and BReq CReq D

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Description: Exercise 17-21 (Algo) Prorating Direct Labor Cost Variances (LO 17-1)Post Parts manufactures components used in audio and video systems. The year just ended was Post's first year of operations andthey are preparing financial statements. The immediat

Labor rate (price) variance:> the variance between the actual labor rate and the standard labor…

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Required: a. and b. What was the direct labor price variance and the direct labor efficiency variance for the year? c. Assume Post writes off all variances to Cost of Goods Sold. Prepare the entries Cook would make to record and close out the variances. d. Assume Post prorates all variances to the appropriate accounts. Prepare the entries Post would make to record and close out the variances.

Required: a. and b. What was the direct labor price variance and the direct labor efficiency variance for the year? c. Assume Post writes off all variances to Cost of Goods Sold. Prepare the entries Cook would make to record and close out the variances. d. Assume Post prorates all variances to the appropriate accounts. Prepare the entries Post would make to record and close out the variances.

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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2. Complete the table below that compute the July direct-material and direct-labor variances in the Construction Department and the July direct-labor variances in the Finishing Department.