Exam 11: Journal Entries to Record Variances

Kouba Manufacturing Corporation's actual direct labor cost for the month of July was $45,000.Its labor rate variance for July was $1,000 unfavorable.Its labor efficiency variance was $5,000 favorable.What summary journal entry would Kouba make to record this information? A) B) C) D) Work in Process 41,000 Labor Efficiency Variance 5,000 $\quad$ $\quad$ Labor Rate Variance 1,000 Wages Payable 45,000

Lian Corporation's standard wage rate is $12.10 per direct labor-hour (DLH)and according to the standards,each unit of output requires 7.1 DLHs.In June,4,500 units were produced,the actual wage rate was $11.90 per DLH,and the actual hours were 35,930 DLHs. -The Labor Rate Variance for June would be recorded as a:

Henifin Corporation has provided the following data concerning its most important raw material,compound K91J: The raw material was purchased on account. Standard cost, per liter......................................... \4 3.10 Standard quantity, liters per unit of output......... 4.5 Cost of material purchased in January, per liter... \4 3.70 Material purchased in January, liters.................... 900 Material used in production in January, liters....... 510 Actual output in January, units........................... 100 -The credits to the Raw Materials account for January would total:

Martorella Corporation has provided the following data concerning its direct labor costs for October: Required: Prepare the journal entry to record the incurrence of direct labor costs. Standard wage rate....... \ 11.40 per DLH Standard hours............ 3.6 DLHs per unit Actual wage rate.......... \ 12.20 per DLH Actual hours............... 21,100 DLHs Actual output............ 6,000 units

Kirsch Corporation's standard wage rate is $13.40 per direct labor-hour (DLH)and according to the standards,each unit of output requires 8.9 DLHs.In May,5,000 units were produced,the actual wage rate was $12.80 per DLH,and the actual hours were 41,790 DLHs.In the journal entry to record the incurrence of direct labor costs in May,the Work in Process entry would consist of a:

Capizzi Corporation has provided the following data concerning its direct labor costs for February: The Labor Efficiency Variance for February would be recorded as a:

Curd Corporation has provided the following data concerning its most important raw material,compound J33X: When recording the use of materials in production,Raw Materials would be:

Murdough Corporation's standard wage rate is $10.80 per direct labor-hour (DLH)and according to the standards,each unit of output requires 2.0 DLHs.In February,1,800 units were produced,the actual wage rate was $9.80 per DLH,and the actual hours were 3,990 DLHs.The Labor Efficiency Variance for February would be recorded as a:

When the actual amount of a raw material used in production is less than the standard amount allowed for the actual output,the journal entry would include:

Vernon Mills,Inc.is a large producer of men's and women's clothing.The company uses standard costs for all of its products.The standard costs and actual costs per unit of product for a recent period are given below for one of the company's product lines: During this period,the company produced 4,800 units of this product.A comparison of standard and actual costs for the period on a total cost basis is given below: There was no inventory of materials on hand at the beginning of the period.During the period,21,120 yards of materials were purchased,all of which were used in production. Required: a.For direct materials,compute the price and quantity variances for the period and prepare journal entries to record all activity relating to direct materials for the period. b.For direct labor,compute the rate and efficiency variances and prepare a journal entry to record the incurrence of direct labor cost for the period. c.For variable overhead,compute the rate and efficiency variances. Standard Cost Actual Cost Direct materials Standard : 4.0 yards at \ 5.40 per yard \ldots. \ 21.60 Actual: 4.4 yards at \ 5.05 per yard \ldots\ldots\ldots \2 2.22 Direct labor: Standard: 1.6 hours at \ 6.75 per hour \ldots\ldots\ldots 10.80 Actual: 1.4 hours at \ 7.30 per hour \ldots\ldots\ldots 10.22 Variable overhead: Standard: 1.6 hours at \ 2.70 per hour \ldots\ldots\ldots Actual: 1.4 hours at \ 3.25 per hour \ldots\ldots\ldots Total cost per unit \ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots Actual costs: 4,800 units at \ 36.99 per unit........... \1 77,552 Standard costs: 4,800 units at \ 36.72 per unit...... Difference in cost.................................................. Unfavorable

Which of the following entries would correctly record the charging of direct labor costs to Work in Process given an unfavorable labor efficiency variance and a favorable labor rate variance?

The standards for product C78 call for 2.0 pounds of a raw material that costs $13.30 per pound.Last month,5,900 pounds of the raw material were purchased for $74,045.The actual output of the month was 2,640 units of product C78.A total of 5,300 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. )

Compound C90N is a raw material used to make Mosbarger Corporation's major product.The standard cost of compound C90N is $38.20 per ounce and the standard quantity is 8.0 ounces per unit of output.Data concerning the compound for September appear below: The raw material was purchased on account. Cost of material purchased in September, per ounce...... \3 7.50 Material purchased in September, ounces....................... 1,100 Material used in production in September, ounces.......... 810 Actual output in September, units................................. 100 -The credits to the Raw Materials account for September would total:

Compound V61Z is used to make Rigby Corporation's major product.The standard cost of compound V61Z is $33.60 per ounce and the standard quantity is 5.5 ounces per unit of output.In the most recent month,3,130 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:

Lemoine Corporation's standard wage rate is $11.50 per direct labor-hour (DLH)and according to the standards,each unit of output requires 5.5 DLHs.In February,8,900 units were produced,the actual wage rate was $11.60 per DLH,and the actual hours were 51,210 DLHs.The Labor Rate Variance for February would be recorded as a:

Compound C90N is a raw material used to make Mosbarger Corporation's major product.The standard cost of compound C90N is $38.20 per ounce and the standard quantity is 8.0 ounces per unit of output.Data concerning the compound for September appear below: The raw material was purchased on account. Cost of material purchased in September, per ounce...... \3 7.50 Material purchased in September, ounces....................... 1,100 Material used in production in September, ounces.......... 810 Actual output in September, units................................. 100 -The debits to the Raw Materials account for September would total:

The Dexon Company makes and sells a single product called a Mip and uses a standard costing system.The following standards have been established for one unit of Mip: There were no inventories of any kind on August 1.During August,the following events occurred: $\bullet$ Purchased 15,000 board feet at the total cost of $24,000. $\bullet$ Used 12,000 board feet to produce 2,100 Mips. $\bullet$ Used 1,700 hours of direct labor time at a total cost of $20,060. Standard Quantity or Hours Standard Cost per Mip Direct materials ...... 6 board feet \ 9.00 Direct labor .......... 0.8 hours \ 9.60 -To record the incurrence of direct labor costs and its use in production,the general ledger would include what entry to the Labor Efficiency Variance account?

The Dexon Company makes and sells a single product called a Mip and uses a standard costing system.The following standards have been established for one unit of Mip: There were no inventories of any kind on August 1.During August,the following events occurred: $\bullet$ Purchased 15,000 board feet at the total cost of $24,000. $\bullet$ Used 12,000 board feet to produce 2,100 Mips. $\bullet$ Used 1,700 hours of direct labor time at a total cost of $20,060. Standard Quantity or Hours Standard Cost per Mip Direct materials ...... 6 board feet \ 9.00 Direct labor .......... 0.8 hours \ 9.60 -To record the incurrence of direct labor cost and its use in production,the general ledger would include what entry to the Labor Rate Variance account?

Lian Corporation's standard wage rate is $12.10 per direct labor-hour (DLH)and according to the standards,each unit of output requires 7.1 DLHs.In June,4,500 units were produced,the actual wage rate was $11.90 per DLH,and the actual hours were 35,930 DLHs. -In the journal entry to record the incurrence of direct labor costs in June,the Work in Process entry would consist of a:

A favorable labor efficiency variance would result in a credit balance in the labor efficiency variance account.