COST ACCOUNTING W/CONNECT
6th Edition
ISBN: 9781264022021
Author: LANEN
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 16, Problem 70P
To determine
Prepare
Expert Solution & Answer

Explanation of Solution
Prepare journal entries to record the activity for the last month using standard costing:
For direct material:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) |
Work-in-Process Inventory | 400,000 | |||
Materials Price Variance | 11,400 | |||
Materials Efficiency Variance | 56,000 | |||
Accounts Payable | 467,400 | |||
(To record the cost related to direct material) |
Table (1)
For direct labor:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) |
Work-in-Process Inventory | 500,000 | |||
Direct Labor Price Variance | 10,080 | |||
Direct Labor Efficiency Variance | 4,000 | |||
Wages Payable | 514,080 | |||
(To record the cost related to direct labor) |
Table (2)
For
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) |
Work-in-Process Inventory (Variable overhead) | 300,000 | |||
Work-in-Process Inventory (Fixed overhead) | 100,000 | |||
Variable Overhead Applied | 300,000 | |||
Fixed Overhead Applied | 100,000 | |||
(To record the fixed and variable overhead applied) | ||||
Overhead (Actual) | 444,000 | |||
Miscellaneous Payables and Inventory Accounts | 444,000 | |||
(To record the actual overhead) | ||||
Variable Overhead (Applied) | 300,000 | |||
Fixed Overhead (Applied) | 100,000 | |||
Overhead Price Variance | 26,400 | |||
Variable Overhead Efficiency Variance | 2,400 | |||
Fixed Overhead Production Volume Variance | 15,200 | |||
Overhead (Actual) | 444,000 | |||
(To record the fixed and variable applied overhead and variances) | ||||
Table (3)
For finished goods:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) |
Finished Goods Inventory | 1,300,000 | |||
Work-in-Process Inventory | 1,300,000 | |||
(To record the finished goods inventory) |
Table (4)
For the sales made:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) |
2,375,000 | ||||
Sales Revenue | 2,375,000 | |||
(To record the sales made) | ||||
Cost of Goods Sold | 1,300,000 | |||
Finished Goods Inventory | 1,300,000 | |||
(To record the cost of goods sold) |
Table (5)
Record the disposition of variances:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) |
Cost of Goods Sold | 125,480 | |||
Materials Price Variance | 11,400 | |||
Materials Efficiency Variance | 56,000 | |||
Direct Labor Price Variance | 10,080 | |||
Direct Labor Efficiency Variance | 4,000 | |||
Variable Overhead Efficiency Variance | 2,400 | |||
Fixed Overhead Production Volume Variance | 15,200 | |||
Overhead Price Variances | 26,400 | |||
(To close the variance accounts to Cost of Goods Sold) | ||||
Table (6)
The
Direct Material Variances | Amount |
Price Variance | $ 11,400 |
Efficiency Variance | $ 56,000 |
Total Variance | $ 67,400U |
Direct Labor Variances | |
Price Variance | $ 10,080 |
Efficiency Variance | $ 4,000 |
Total Variance | $ 14,080U |
Variable Overhead Variance: | |
Efficiency Variance | $ 2,400U |
Total Variance | $ 2,400U |
Fixed Overhead Variance | |
Production Volume Variance | $ 15,200 |
Total Variance | $ 15,200U |
Table (7)
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Please read my financial accounting question properly and give me correct answer this question
Analysts are projecting that Capital Railways will have earnings per share of $4.20. If the average industry P/E ratio is 22, what is the current price of Capital Railways?
What is the capital gain?
Chapter 16 Solutions
COST ACCOUNTING W/CONNECT
Ch. 16 - What are the advantages of the contribution margin...Ch. 16 - How can a budget be used for performance...Ch. 16 - The flexible budget for coats it computed by...Ch. 16 - A flexible budget is: a. Appropriate for control...Ch. 16 - What is the standard cost sheet?Ch. 16 - What is the basic difference between a mailer...Ch. 16 - Standards and budgets are the same thing. True or...Ch. 16 - Actual direct materials costs differ from the...Ch. 16 - Fixed cost variances are computed differently from...Ch. 16 - What is the advantage of preparing the flexible...
Ch. 16 - What is the link between flexible budgeting and...Ch. 16 - Actual revenues are greater than budgeted for...Ch. 16 - Pick an organization you know, such as a school,...Ch. 16 - Give two reasons why dividing production cost...Ch. 16 - Prob. 15CADQCh. 16 - My firm has a wage contract with the union....Ch. 16 - Prob. 17CADQCh. 16 - The production volume variance should be charged...Ch. 16 - Prob. 19CADQCh. 16 - Prob. 20CADQCh. 16 - Flexible Budgeting The master budget at Western...Ch. 16 - Sales Activity Variance Refer to the data in...Ch. 16 - Profit Variance Analysis Refer to the data in...Ch. 16 - Flexible Budget Given the data shown in the...Ch. 16 - Fill in Amounts on Flexible Budget Graph Fill in...Ch. 16 - Flexible Budget Label (a) and (b) in the graph and...Ch. 16 - Prepare Flexible Budget Osage, Inc., manufactures...Ch. 16 - Sales Activity Variance Refer to the data in...Ch. 16 - Profit Variance Analysis Use the information from...Ch. 16 - Sales Activity Variance The following data are...Ch. 16 - Sales Activity Variance Selected data for October...Ch. 16 - Prob. 32ECh. 16 - Prob. 33ECh. 16 - Prob. 34ECh. 16 - Prob. 35ECh. 16 - Prob. 36ECh. 16 - Prob. 37ECh. 16 - Variable Cost Variances The following data reflect...Ch. 16 - Variable Cost Variances The records of Norton,...Ch. 16 - (Appendix used in requirement [b]) Variable Cost...Ch. 16 - (Appendix used in requirement [b]) Variable Cost...Ch. 16 - Fixed Cost Variances Information on Carney...Ch. 16 - Prob. 43ECh. 16 - Prob. 44ECh. 16 - Fixed Cost Variances Mint Company applies fixed...Ch. 16 - Prob. 46ECh. 16 - Prob. 47ECh. 16 - (Appendix used in requirement [c]) Comprehensive...Ch. 16 - Comprehensive Cost Variance Analysis NSF Lube is a...Ch. 16 - Overhead Variances Brice Corporation shows the...Ch. 16 - Solve for Master Budget Given Actual Results A new...Ch. 16 - Find Missing Data for Profit Variance Analysis...Ch. 16 - Find Data for Profit Variance Analysis Required...Ch. 16 - Prob. 54PCh. 16 - Prepare Flexible Budget Odessa, Inc., reports the...Ch. 16 - Prob. 56PCh. 16 - Prob. 57PCh. 16 - Prob. 58PCh. 16 - Prob. 59PCh. 16 - Prob. 60PCh. 16 - Direct Materials Information about direct...Ch. 16 - Prob. 62PCh. 16 - Prob. 63PCh. 16 - Prob. 64PCh. 16 - Overhead Cost and Variance Relationships...Ch. 16 - Prob. 66PCh. 16 - Prob. 67PCh. 16 - Ethics and Standard Costs Farmer Franks produces...Ch. 16 - Comprehensive Variance Problem The standard cost...Ch. 16 - Prob. 70PCh. 16 - Find Actual and Budget Amounts from Variances JW...Ch. 16 - Variance Computations with Missing Data The...Ch. 16 - Comprehensive Variance Problem Sweetwater Company...Ch. 16 - Prob. 74PCh. 16 - Prob. 75PCh. 16 - Keewee Company manufactures a single product for...
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.Similar questions
- Financial accountingarrow_forwardChipa Corp. started the year with total assets of $303,000 and total liabilities of $243,000. During the year the business recorded $631,000 in revenues, $329,000in expenses, and dividends of $57,000. Stockholders' equity at the end of the year was _. Solve the financial accounting problem.arrow_forwardTutor, need your helparrow_forward
- ??!!arrow_forwardOlivia, single and age 58, sold her home for $485,000 after living there for 10 years. Her selling expenses were $9,000 and her adjusted basis in the home was $200,000. What is the maximum gain that Olivia must report in connection with the sale of her principal residence? a) $26,000 b) $0 c) $285,000 d) $276,000arrow_forwardBrightCo has a net income of $5.4 million and 2 million common shares outstanding. Each share is currently trading at $27 in the stock market. What is BrightCo's current EPS and P/E ratio?arrow_forward
- Nonearrow_forwardMiller Manufacturing, which produces a single product, has provided the following data for its most recent month of operations: • Number of units produced: 1,200 • Variable costs per unit: o Direct materials: $60 о Direct labor: $50 • о Variable manufacturing overhead: $9 Variable selling and administrative expense: $10 Fixed costs: о Fixed manufacturing overhead: $48,000 。 Fixed selling and administrative expense: $84,000 There were no beginning or ending inventories. The absorption costing unit product cost was: a) $172 per unit b) $230 per unit c) $119 per unit d) $159 per unitarrow_forwardStep by step answerarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education


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
Markup and Markdown; Author: GreggU;https://www.youtube.com/watch?v=EFtodgI46UM;License: Standard Youtube License