Standards: 3 yards of cloth per unit at $1.05 per yard 2 direct labor hours per unit at $10.50 per hour Overhead allocated at $5.00 per direct labor hour Actual: 2,600 yards of cloth were purchased at $1.10 per yard Employees worked 1,800 hours and were paid $10.00 per hour Actual variable overhead was $1,700 Actual fixed overhead was $7,300 Direct materials cost variance $ 130 U Direct materials efficiency variance 420 F Direct labor cost variance 900 F Direct labor efficiency variance 2,100 F Variable overhead cost variance 1,500 U Variable overhead efficiency variance 1,500 F Fixed overhead cost variance 600 U Fixed overhead volume variance 1,600 F

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
Question

Preparing journal entries

Marsh Company uses a standard cost system and reports the following information for 2018.

Marsh Company reported the following variances:

Marsh produced 1,000 units of finished product in 2018. Record the journal entries to record direct materials, direct labor, variable overhead, and fixed overhead, assuming all expenditures were on account and there were no beginning or ending balances in the inventory accounts (all materials purchased were used in production, and all goods produced were sold). Record the journal entries to record the transfer to Finished Goods Inventory and Cost of Goods Sold (omit the journal entry for Sales Revenue). Adjust the Manufacturing Overhead account.

Standards:
3 yards of cloth per unit at $1.05 per yard
2 direct labor hours per unit at $10.50 per hour
Overhead allocated at $5.00 per direct labor hour
Actual:
2,600 yards of cloth were purchased at $1.10 per yard
Employees worked 1,800 hours and were paid $10.00 per hour
Actual variable overhead was $1,700
Actual fixed overhead was $7,300
Transcribed Image Text:Standards: 3 yards of cloth per unit at $1.05 per yard 2 direct labor hours per unit at $10.50 per hour Overhead allocated at $5.00 per direct labor hour Actual: 2,600 yards of cloth were purchased at $1.10 per yard Employees worked 1,800 hours and were paid $10.00 per hour Actual variable overhead was $1,700 Actual fixed overhead was $7,300
Direct materials cost variance
$ 130 U
Direct materials efficiency variance
420 F
Direct labor cost variance
900 F
Direct labor efficiency variance
2,100 F
Variable overhead cost variance
1,500 U
Variable overhead efficiency variance
1,500 F
Fixed overhead cost variance
600 U
Fixed overhead volume variance
1,600 F
Transcribed Image Text:Direct materials cost variance $ 130 U Direct materials efficiency variance 420 F Direct labor cost variance 900 F Direct labor efficiency variance 2,100 F Variable overhead cost variance 1,500 U Variable overhead efficiency variance 1,500 F Fixed overhead cost variance 600 U Fixed overhead volume variance 1,600 F
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 5 images

Blurred answer
Knowledge Booster
Performance measurements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education