Exam 28: Journal Entries to Record Variances

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:

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: Purchased 15,000 board feet at the total cost of $24,000. Used 12,000 board feet to produce 2,100 Mips. Used 1,700 hours of direct labor time at a total cost of $20,060. -To record the use of direct materials in production, the general ledger would include what entry to the Materials Quantity Variance account?

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:

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

When the actual wage rate paid to direct labor workers is less than the standard wage rate, the journal entry would include:

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.)

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 Efficiency Variance for June would be recorded as a:

The following standards have been established for a raw material used in the production of product N70:

Compound A39A is used by Ashline Corporation to make one of its products. The standard cost of compound A39A is $32.00 per ounce and the standard quantity is 8.5 per unit of output. Data concerning the compound in the most recent month appear below: The raw material was purchased on account. Required: a. Record the purchase of the raw material in a journal entry. b. Record the use of the raw material in production in a journal entry.

Henifin Corporation has provided the following data concerning its most important raw material, compound K91J: The raw material was purchased on account. -The debits to the Raw Materials account for January would total:

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

When the actual price paid on credit for a raw material is less than its standard price, the journal entry would include:

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: Purchased 15,000 board feet at the total cost of $24,000. Used 12,000 board feet to produce 2,100 Mips. Used 1,700 hours of direct labor time at a total cost of $20,060. -To record the purchase of direct materials, the general ledger would include what entry to the Materials Price Variance Account?

The standards for product V33I specify 8.0 direct labor-hours per unit at $11.20 per direct labor-hour. Last month 760 units of product V33I were produced using 6,500 direct labor-hours at a total direct labor wage cost of $75,075. 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.

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

The direct labor standards at Lounsbury Corporation are $12.50 per direct labor-hour (DLH) and 6.1 DLHs per unit of output. In November, 4,700 units were produced, the actual wage rate was $12.50 per DLH, and the actual hours were 29,570 DLHs. Required: Prepare the journal entry to record the incurrence of direct labor costs.

A favorable materials quantity variance would appear as a debit in a journal entry.

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: Purchased 15,000 board feet at the total cost of $24,000. Used 12,000 board feet to produce 2,100 Mips. Used 1,700 hours of direct labor time at a total cost of $20,060. -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?

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.

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