Standards: 3 yards of cloth per unit at $1.10 per yard 2 direct labor hours per unit at $11.00 per hour Overhead allocated at $4.00 per direct labor hour Actual: 2,400 yards of cloth were purchased at $1.15 per yard Employees worked 1,600 hours and were paid $10.50 per hour Actual variable overhead was $2,500 Actual fixed overhead was $3,900 Direct materials cost variance $120 U Direct materials efficiency variance 660 F Direct labor cost variance 800 F Direct labor efficiency variance 4,400 F Variable overhead cost variance 1,300 U Variable overhead efficiency variance 1,300 F Fixed overhead cost variance 100 U Fixed overhead volume variance 1,700 F Begin by journalizing the purchase of direct materials on account, including the related variance. (Prepare a single compound journal entry.)
Standards: 3 yards of cloth per unit at $1.10 per yard 2 direct labor hours per unit at $11.00 per hour Overhead allocated at $4.00 per direct labor hour Actual: 2,400 yards of cloth were purchased at $1.15 per yard Employees worked 1,600 hours and were paid $10.50 per hour Actual variable overhead was $2,500 Actual fixed overhead was $3,900 Direct materials cost variance $120 U Direct materials efficiency variance 660 F Direct labor cost variance 800 F Direct labor efficiency variance 4,400 F Variable overhead cost variance 1,300 U Variable overhead efficiency variance 1,300 F Fixed overhead cost variance 100 U Fixed overhead volume variance 1,700 F Begin by journalizing the purchase of direct materials on account, including the related variance. (Prepare a single compound journal entry.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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.
Topic Video
Question
Standards:
3 yards of cloth per unit at $1.10 per yard
2 direct labor hours per unit at $11.00 per hour
Actual:
2,400 yards of cloth were purchased at $1.15 per yard
Employees worked 1,600 hours and were paid $10.50 per hour
Actual variable overhead was $2,500
Actual fixed overhead was $3,900
Direct materials cost variance $120 U
Direct materials efficiency variance 660 F
Direct labor cost variance 800 F
Direct labor efficiency variance 4,400 F
Variable overhead cost variance 1,300 U
Variable overhead efficiency variance 1,300 F
Fixed overhead cost variance 100 U
Fixed overhead volume variance 1,700 F
Begin by journalizing the purchase of direct materials on account, including the related variance. (Prepare a single compound journal entry.)
|
Date
|
Accounts and Explanation
|
Debit
|
Credit
|
||
|
|
Raw Materials Inventory
|
|
|
||
|
|
Direct Materials Cost Variance
|
120
|
|
||
|
|
Accounts Payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased direct materials.
|
|
|
|
Now, journalize the usage of direct materials, including the related variance. (Prepare a single compound journal entry.)
|
Date
|
Accounts and Explanation
|
Debit
|
Credit
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Journalize the incurrance and assignment of direct labor costs, including the related variances. (Prepare a single compound journal entry.)
|
Date
|
Accounts and Explanation
|
Debit
|
Credit
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Journalize the entry to show the actual manufacturing overhead costs incurred.
|
Date
|
Accounts and Explanation
|
Debit
|
Credit
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Record the overhead allocated to Work-in-Process Inventory.
|
Date
|
Accounts and Explanation
|
Debit
|
Credit
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Journalize the movement of all production from Work-in-Process Inventory.
|
Date
|
Accounts and Explanation
|
Debit
|
Credit
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Record the entry to transfer the cost of sales at standard cost.
|
Date
|
Accounts and Explanation
|
Debit
|
Credit
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Journalize the adjusting of the Manufacturing Overhead account. (Prepare a single compound journal entry.)
|
Date
|
Accounts and Explanation
|
Debit
|
Credit
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Choose from any list or enter any number in the input fields and then continue to the next question.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education