Exam 24: Journal Entries to Record Variances

Wahlen Corporation has provided the following data concerning its direct labor costs for November: Required: Prepare the journal entry to record the incurrence of direct labor costs.

Denise Corporation's standard wage rate is $14.40 per direct labor-hour (DLH)and according to the standards,each unit of output requires 7.0 DLHs.In May,5,200 units were produced,the actual wage rate was $13.70 per DLH,and the actual hours were 36,520 DLHs.The Labor Efficiency Variance for May would be recorded as a:

Compound Q11H is a raw material used to make Grater Corporation's major product. The standard cost of compound Q11H is $23.00 per ounce and the standard quantity is 3.8 ounces per unit of output. Data concerning the compound for October appear below: The raw material was purchased on account. -The Materials Quantity Variance for October would be recorded as a:

Karo Corporation has provided the following data concerning its direct labor costs for December: -The journal entry to record the incurrence of direct labor costs in December would include the following for Work in Process:

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

Bordes Corporation has provided the following data concerning its most important raw material, compound R85F: The raw material was purchased on account. -The debits to the Raw Materials account for May would total:

At the end of the year,a company's Manufacturing Overhead account contained the following data: If the denominator activity for the year was 40,000 machine-hours,and if 36,400 machine-hours were allowed for the year's production,then the predetermined overhead rate per machine-hour was:

Although formal entry of standard costs and variances into the accounting records is not required,some organizations make such entries in order to emphasize the importance of variances as well as to simplify the bookkeeping process.

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

The Odle Company makes and sells a single product called a Kitt. Odle uses a standard costing system. Each Kitt has a standard cost of 5 pounds of material at $12 per pound and 0.9 direct labor-hours at $15 per hour. There were no inventories of any kind on June 1. During June, the following events occurred: • Purchased 17,000 pounds of material at a total cost of $190,000. • Used 15,000 pounds of material to produce 2,400 Kitts. • Used 1,900 hours of direct labor time at a total cost of $38,000. -To record the incurrence of direct labor cost and its use in production,the general ledger would include what kind of entry to the Labor Rate Variance account?

The Odle Company makes and sells a single product called a Kitt. Odle uses a standard costing system. Each Kitt has a standard cost of 5 pounds of material at $12 per pound and 0.9 direct labor-hours at $15 per hour. There were no inventories of any kind on June 1. During June, the following events occurred: • Purchased 17,000 pounds of material at a total cost of $190,000. • Used 15,000 pounds of material to produce 2,400 Kitts. • Used 1,900 hours of direct labor time at a total cost of $38,000. -To record the incurrence of direct labor cost and its use in production,the general ledger would include what kind of entry to the Labor Efficiency Variance account?

The direct labor standards at Pihl Corporation are $11.70 per direct labor-hour (DLH)and 7.2 DLHs per unit of output.In May,1,300 units were produced,the actual wage rate was $12.00 per DLH,and the actual hours were 9,460 DLHs. Required: Prepare the journal entry to record the incurrence of direct labor costs.

The Odle Company makes and sells a single product called a Kitt. Odle uses a standard costing system. Each Kitt has a standard cost of 5 pounds of material at $12 per pound and 0.9 direct labor-hours at $15 per hour. There were no inventories of any kind on June 1. During June, the following events occurred: • Purchased 17,000 pounds of material at a total cost of $190,000. • Used 15,000 pounds of material to produce 2,400 Kitts. • Used 1,900 hours of direct labor time at a total cost of $38,000. -To record the purchase of direct materials,the general ledger would include what kind of entry to the Materials Price Variance Account?

If the actual quantity of materials used is less than the standard quantity of materials allowed for the actual output,then the journal entry to record the Direct Materials Quantity Variance would be a credit.

Compound Q11H is a raw material used to make Grater Corporation's major product. The standard cost of compound Q11H is $23.00 per ounce and the standard quantity is 3.8 ounces per unit of output. Data concerning the compound for October appear below: The raw material was purchased on account. -The debits to the Raw Materials account for October would total:

Durrant Corporation has provided the following data concerning its most important raw material,compound O96H: When recording the use of materials in production,Raw Materials would be:

Compound K47E is used to make Goforth Corporation's major product.The standard cost of compound K47E is $24.50 per ounce and the standard quantity is 6.1 ounces per unit of output.In the most recent month,5,030 ounces of the compound were used to make 700 units of the output.When recording the use of materials in production,Raw Materials would be:

If the actual rate per direct labor-hour exceeds the standard rate per direct labor-hour,then the journal entry to record the Direct Labor Rate Variance would be a credit.

Raybould Corporation has provided the following data concerning its most important raw material,compound M31P: When recording the purchase of materials,Raw Materials would be:

Mate Corporation's standard wage rate is $11.90 per direct labor-hour (DLH) and according to the standards, each unit of output requires 4.5 DLHs. In May, 2,900 units were produced, the actual wage rate was $11.50 per DLH, and the actual hours were 15,530 DLHs. -The Labor Rate Variance for May would be recorded as a: