Standard-costing with beginning and ending work in process. Lawrence Company is a manufac- turer of contemporary door handles. The vice president of Design attends home shows twice a year so the company can keep current with home trends. Because of its volume, Lawrence uses process costing to account for production. Costs and output figures for August are as follows: Lawrence Company's Process Costing for the Month Ended August 31, 2017 Units Direct Materials Conversion Costs $ 5.75 $ 86,250 Standard cost per unit 12.25 $ 55,125 Work in process, beginning inventory (Aug. 1) Degree of completion of beginning work in process Started in August Completed and transferred out Work in process, ending inventory (Aug. 31) Degree of completion of ending work in process Total costs added during August 15,000 100% 30% 100,000 95,000 20,000 100% 80% $569,000 $1,307,240

Standard-costing with beginning and ending work in process. Lawrence Company is a manufac- turer of contemporary door handles. The vice president of Design attends home shows twice a year so the company can keep current with home trends. Because of its volume, Lawrence uses process costing to account for production. Costs and output figures for August are as follows: Lawrence Company's Process Costing for the Month Ended August 31, 2017 Units Direct Materials Conversion Costs $ 5.75 $ 86,250 Standard cost per unit 12.25 $ 55,125 Work in process, beginning inventory (Aug. 1) Degree of completion of beginning work in process Started in August Completed and transferred out Work in process, ending inventory (Aug. 31) Degree of completion of ending work in process Total costs added during August 15,000 100% 30% 100,000 95,000 20,000 100% 80% $569,000 $1,307,240

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Description: Prepare summarized journal entries to record both the actual costs and standard costs for direct materials and conversion costs, including the variances for both production costs. Standard-costing with beginning and ending work in process. Lawrence C

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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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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Question

Prepare summarized journal entries to record both the actual costs and standard costs for direct materials and conversion costs, including the variances for both production costs.

Standard-costing with beginning and ending work in process. Lawrence Company is a manufac-
turer of contemporary door handles. The vice president of Design attends home shows twice a year so the
company can keep current with home trends. Because of its volume, Lawrence uses process costing to
account for production. Costs and output figures for August are as follows:
Lawrence Company's Process Costing
for the Month Ended August 31, 2017
Units
Direct Materials Conversion Costs
$ 5.75
$ 86,250
Standard cost per unit
12.25
$ 55,125
Work in process, beginning inventory (Aug. 1)
Degree of completion of beginning work in process
Started in August
Completed and transferred out
Work in process, ending inventory (Aug. 31)
Degree of completion of ending work in process
Total costs added during August
15,000
100%
30%
100,000
95,000
20,000
100%
80%
$569,000
$1,307,240

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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