The Monroe Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labor: Rs. 45.00 Direct materials: 10 lb. at Rs.4.50 per lb. 15.00 Direct manufacturing labor: 0.5 hour at Rs.30 per hour The number of finished units budgeted for January 2020 was 10,000; 9,850 units were actually produced. Actual results in January 2020 were as follows: Direct materials: 98,055 lb. used Direct manufacturing labor: 4,900 hours Rs. 154,350 Assume that there was no beginning inventory of either direct materials or finished units. During the month, materials purchased amounted to 100,000 lb., at a total cost of Rs.465,000. Input price variances are isolated upon purchase. Input-efficiency variances are isolated at the time of usage. Required Compute the January 2020 price and eff.ciency variances of direct materials and direct manufacturing labor. Prepare journal entries to record the variances in requirement 1. Comment on the January 2020 price and efficiency variances of Monroe Corporation. Why might Monroe calculate direct materials price variances and direct materials efficiency variances with reference to different points in time? i. ii. ii. iv.

The Monroe Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labor: Rs. 45.00 Direct materials: 10 lb. at Rs.4.50 per lb. 15.00 Direct manufacturing labor: 0.5 hour at Rs.30 per hour The number of finished units budgeted for January 2020 was 10,000; 9,850 units were actually produced. Actual results in January 2020 were as follows: Direct materials: 98,055 lb. used Direct manufacturing labor: 4,900 hours Rs. 154,350 Assume that there was no beginning inventory of either direct materials or finished units. During the month, materials purchased amounted to 100,000 lb., at a total cost of Rs.465,000. Input price variances are isolated upon purchase. Input-efficiency variances are isolated at the time of usage. Required Compute the January 2020 price and eff.ciency variances of direct materials and direct manufacturing labor. Prepare journal entries to record the variances in requirement 1. Comment on the January 2020 price and efficiency variances of Monroe Corporation. Why might Monroe calculate direct materials price variances and direct materials efficiency variances with reference to different points in time? i. ii. ii. iv.

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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