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Rocky Mountain Camping Equipment, Inc. has established the following direct-material standards for its two products. Standard Price Standard camping tent Deluxe backpacking tent Standard Quantity 24 yards 19 yards $11.00 $8.20 per yard per yard During March, the company purchased 4,400 yards of tent fabric for its standard model at a cost of $49,720. The actual March production of the standard tent was 140 tents, and 3,460 yards of fabric were used. Also during March, the company purchased 1,400 yards of the same tent fabric for its deluxe backpacking tent at a cost of $11,060. The firm used 4,180 yards of the fabric during March in the production of 220 deluxe tents. Required: 1. Compute the direct-material purchase price variance and quantity variance for March. 2. Prepare journal entries to record the purchase of material, use of material, and incurrence of variances in March.

Rocky Mountain Camping Equipment, Inc. has established the following direct-material standards for its two products. Standard Price Standard camping tent Deluxe backpacking tent Standard Quantity 24 yards 19 yards $11.00 $8.20 per yard per yard During March, the company purchased 4,400 yards of tent fabric for its standard model at a cost of $49,720. The actual March production of the standard tent was 140 tents, and 3,460 yards of fabric were used. Also during March, the company purchased 1,400 yards of the same tent fabric for its deluxe backpacking tent at a cost of $11,060. The firm used 4,180 yards of the fabric during March in the production of 220 deluxe tents. Required: 1. Compute the direct-material purchase price variance and quantity variance for March. 2. Prepare journal entries to record the purchase of material, use of material, and incurrence of variances in March.

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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Rocky Mountain Camping Equipment, Inc. has established the following direct-material standards for its two products. Standard Price Standard camping tent Deluxe backpacking tent Standard Quantity 24 yards 19 yards $11.00 $ 8.20 per yard per yard During March, the company purchased 4,400 yards of tent fabric for its standard model at a cost of $49,720. The actual March production of the standard tent was 140 tents, and 3,460 yards of fabric were used. Also during March, the company purchased 1,400 yards of the same tent fabric for its deluxe backpacking tent at a cost of $11,060. The firm used 4,180 yards of the fabric during March in the production of 220 deluxe tents. Required: 1. Compute the direct-material purchase price variance and quantity variance for March. 2. Prepare journal entries to record the purchase of material, use of material, and incurrence of variances in March.
Transcribed Image Text:Rocky Mountain Camping Equipment, Inc. has established the following direct-material standards for its two products. Standard Price Standard camping tent Deluxe backpacking tent Standard Quantity 24 yards 19 yards $11.00 $ 8.20 per yard per yard During March, the company purchased 4,400 yards of tent fabric for its standard model at a cost of $49,720. The actual March production of the standard tent was 140 tents, and 3,460 yards of fabric were used. Also during March, the company purchased 1,400 yards of the same tent fabric for its deluxe backpacking tent at a cost of $11,060. The firm used 4,180 yards of the fabric during March in the production of 220 deluxe tents. Required: 1. Compute the direct-material purchase price variance and quantity variance for March. 2. Prepare journal entries to record the purchase of material, use of material, and incurrence of variances in March.
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