Exam 15: Journal Entries to Record Variances

Widman, Inc. makes and sells only one product and uses standard costing. The standard cost sheet for one unit of product includes the following: • Direct materials: 5 grams at $0.35 per gram • Direct labor: 1 hour at $8 per hour Last period the company had the following results: • 5,000 grams of direct materials purchased at $0.40 per gram • 4,000 grams of direct materials used in production • 900 units of product were made • 850 hours of direct labor were used at $8.50 per hour The journal entry to record the use of direct materials in production last period would include:

Slife Corporation has provided the following data concerning its most important raw material, compound G81N: When recording the use of materials in production, Raw Materials would be:

Cafferty Corporation has provided the following data concerning its direct labor costs for March: The Labor Rate Variance for March would be recorded as a:

Florea Corporation has provided the following data concerning its most important raw material, compound K09B: The raw material was purchased on account. The debits to the Raw Materials account for August would total:

Compound K52E is a raw material used to make Pinkos Corporation's major product. The standard cost of compound K52E is $46.00 per ounce and the standard quantity is 5.0 ounces per unit of output. Data concerning the compound for March appear below: The raw material was purchased on account. The debits to the Raw Materials account for March would total:

An unfavorable labor efficiency variance is recorded as a debit in the Labor Efficiency Variance account.

Marusarz Corporation has provided the following data concerning its most important raw material, compound F55M: When recording the purchase of materials, Raw Materials would be:

Widman, Inc. makes and sells only one product and uses standard costing. The standard cost sheet for one unit of product includes the following: • Direct materials: 5 grams at $0.35 per gram • Direct labor: 1 hour at $8 per hour Last period the company had the following results: • 5,000 grams of direct materials purchased at $0.40 per gram • 4,000 grams of direct materials used in production • 900 units of product were made • 850 hours of direct labor were used at $8.50 per hour The journal entry to record the incurrence of direct labor cost last period would include:

Enwall Corporation's standard wage rate is $11.20 per direct labor-hour (DLH) and according to the standards, each unit of output requires 2.9 DLHs. In December, 5,900 units were produced, the actual wage rate was $10.20 per DLH, and the actual hours were 14,150 DLHs. The Labor Efficiency Variance for December would be recorded as a:

An unfavorable labor rate variance is recorded as a debit in the Labor Rate Variance account.

An unfavorable materials quantity variance is recorded as a debit in the Materials Quantity Variance account.

When the actual price to purchase a raw material on account is less than its standard price, the journal entry would include:

If the actual direct labor-hours used is less than the standard direct labor-hours allowed for the actual output, then the journal entry to record the Labor Efficiency Variance would be a credit.

Results of operations for the Anderson Corporation indicated that the actual direct labor rate for May was $9.75 while the standard rate was $10.00. The general ledger entry to record the incurrence of direct labor cost would include:

The standards for product Q58W specify 8.4 direct labor-hours per unit at $14.00 per direct labor-hour. Last month 400 units of product Q58W were produced using 2,800 direct labor-hours at a total direct labor wage cost of $41,020. Required: a. What was the labor rate variance for the month? b. What was the labor efficiency variance for the month? c. Prepare a journal entry to record direct labor costs during the month, including the direct labor variances.

The standards for product F28 call for 2.7 pounds of a raw material that costs $16.50 per pound. Last month, 4,100 pounds of the raw material were purchased for $70,520. The actual output of the month was 1,300 units of product F28. A total of 3,500 pounds of the raw material were used to produce this output. Required: a. What is the materials price variance for the month? b. What is the materials quantity variance for the month? c. Prepare journal entries to record the purchase and use of the raw material during the month. (All raw materials are purchased on account.)

Data concerning the direct labor costs for March of Boler Corporation appear below: The journal entry to record the incurrence of direct labor costs in March would include the following for Work in Process:

Florea Corporation has provided the following data concerning its most important raw material, compound K09B: The raw material was purchased on account. The credits to the Raw Materials account for August would total:

Compound K52E is a raw material used to make Pinkos Corporation's major product. The standard cost of compound K52E is $46.00 per ounce and the standard quantity is 5.0 ounces per unit of output. Data concerning the compound for March appear below: The raw material was purchased on account. The Materials Price Variance for March would be recorded as a:

Enwall Corporation's standard wage rate is $11.20 per direct labor-hour (DLH) and according to the standards, each unit of output requires 2.9 DLHs. In December, 5,900 units were produced, the actual wage rate was $10.20 per DLH, and the actual hours were 14,150 DLHs. The Labor Rate Variance for December would be recorded as a: