
Concept explainers
a.
Provide a
a.

Explanation of Solution
Materials—2 lb @ $8 | $16 |
Labor—1 hr @ $10 | $10 |
Factory | $4 |
Standard unit cost | $30 |
Figure (1)
b.
Examine the variances for materials and labor.
b.

Explanation of Solution
Calculate material price variance:
Calculate materials quantity variance:
Calculate Labor rate variance:
Calculate labor efficiency variance:
c.
Prepare journal entries.
c.

Explanation of Solution
(1)
Date | Account Title and Explanation | Debit ($) | Credit($) |
Work in Process | $16,000 | ||
Materials Price Variance | $950 | ||
Materials Quantity Variance | $800 | ||
Materials | $16,150 | ||
(to record the entry for direct materials cost when the materials are issued into production) |
Table (1)
(2)
Date | Account Title and Explanation | Debit ($) | Credit($) |
Work in Process | $10,000 | ||
Labor Rate Variance | $180 | ||
Labor efficiency Variance | $1,000 | ||
Payroll | $9,180 | ||
(to record the entry for direct labor cost) |
Table (2)
(3)
Date | Account Title and Explanation | Debit ($) | Credit($) |
Work in Process | $4,000 | ||
Applied Factory overhead | $4,000 | ||
(to record the entry applying factory overhead to work in process) |
Table (3)
d.
Prepare the
d.

Explanation of Solution
Case 1 and case 2:
Date | Account Title and Explanation | Debit ($) | Credit($) |
Finished Goods | $30,000 | ||
Work in process | $30,000 | ||
(to record the entry for finished goods at standard cost) |
Table (4)
Want to see more full solutions like this?
Chapter 8 Solutions
Principles of Cost Accounting
- Please explain the solution to this general accounting problem with accurate explanations.arrow_forwardYour company purchases $6,200 of office supplies, recording them as assets. At year end, a physical count shows $1,800 of supplies on hand. The year-end adjusting entry debits Supplies Expense and credits Supplies on hand for $1,800. The correcting entry will _.arrow_forwardHow much profit (loss) does the company make by processing the intermediate product cane syrup into refined syrup rather than selling it as is?arrow_forward
- XYZ Industries manufactures premium-quality glassware. The standard materials cost is 4 pounds of raw glass at $2.25 per pound. During October, 18,000 pounds of raw glass costing $2.40 per pound were used to produce 7,200 glassware items. Determine the materials price variance and materials quantity variance.arrow_forwardHello tutor please help me this questionarrow_forwardHelp this best solution Accounting questionarrow_forward
- General Accounting Questionarrow_forwardSolve thisarrow_forwardMartinez Industries manufactures wood polish. The standard direct materials quantity is 0.70 pounds per bottle at a cost of $2.80 per pound. The actual usage for the production of 45,000 bottles was 0.75 pounds per bottle at an actual cost of $2.75 per pound. Calculate the direct materials price variance and the direct materials quantity variance.arrow_forward
- Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage LearningManagerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningPrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College

