Deck 11: Journal Entries to Record Variances

Question 1

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:

A)credit of $7,014.
B)debit of $8,584.
C)debit of $7,014.
D)credit of $8,584.

Answer 1

credit of $7,014.

Question 2

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:

A)debited for $41,417.
B)credited for $41,417.
C)debited for $38,922.
D)credited for $38,922.

Answer 2

credited for $41,417.

Question 3

Drake Company purchased materials on account.The entry to record the purchase of materials having a standard cost of $1.50 per pound from a supplier at $1.60 per pound would include a:

A)credit to Raw Materials Inventory.
B)debit to Work in Process.
C)credit to Materials Price Variance.
D)debit to Materials Price Variance.

Answer 3

D

Question 4

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:

A)credit of $296,424.
B)debit of $296,424.
C)credit of $388,962.
D)debit of $388,962.

Question 5

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:

A)debit of $596,300.
B)debit of $534,912.
C)credit of $534,912.
D)credit of $596,300.

Question 6

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:

A)debit of $45,562.
B)credit of $45,562.
C)debit of $44,726.
D)credit of $44,726.

Question 7

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:

A)debit of $4,212.
B)credit of $4,212.
C)debit of $3,822.
D)credit of $3,822.

Question 8

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:

A)Debit to Raw Materials;Credit to Materials Quantity Variance
B)Debit to Work-In-Process;Credit to Materials Quantity Variance
C)Debit to Raw Materials;Debit to Materials Quantity Variance
D)Debit to Work-In-Process;Debit to Materials Quantity Variance

Question 9

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

A)Debit to Raw Materials;Credit to Materials Price Variance
B)Debit to Accounts Payable;Credit to Materials Price Variance
C)Debit to Raw Materials;Debit to Materials Price Variance
D)Debit to Accounts Payable;Debit to Materials Price Variance

Question 10

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)

Question 11

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

A)Credit to Wages Payable;Credit to Labor Rate Variance
B)Credit to Work-In-Process;Credit to Labor Rate Variance
C)Credit to Wages Payable;Debit to Labor Rate Variance
D)Credit to Work-In-Process;Debit to Labor Rate Variance

Question 12

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

Question 13

When the actual direct labor-hours are less than the standard direct labor-hours allowed for the actual output of the period,the journal entry would include:

A)Credit to Wages Payable;Credit to Labor Efficiency Variance
B)Credit to Work-In-Process;Credit to Labor Efficiency Variance
C)Credit to Wages Payable;Debit to Labor Efficiency Variance
D)Credit to Work-In-Process;Debit to Labor Efficiency Variance

Question 14

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.
$\begin{array}{lcc}&\text { Standard Quantity or Hours }&\text { Standard Cost per Mip }\\ \text { Direct materials ...... } & 6 \text { board feet } & \$ 9.00 \\\text { Direct labor .......... } & 0.8 \text { hours } & \$ 9.60\end{array}$

-To record the purchase of direct materials,the general ledger would include what entry to the Materials Price Variance Account?

A)$1,500 credit
B)$1,500 debit
C)$6,000 credit
D)$6,000 debit

Question 15

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:

A)credited for $129,360.
B)credited for $105,168.
C)debited for $105,168.
D)debited for $129,360.

Question 16

Compound G92N is used to make Passero Corporation's major product.The standard cost of G92N is $28.60 per ounce and the standard quantity is 2.9 ounces per unit of output.In the most recent month,2,000 ounces of the raw material were purchased at a cost of $29.50 per ounce.When recording the purchase of materials,Raw Materials would be:

A)credited for $59,000.
B)debited for $57,200.
C)credited for $57,200.
D)debited for $59,000.

Question 17

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?

A)Labor Efficiency Variance
B)Labor Rate Variance
C)Wages Payable
D) Work in Process

Question 18

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

Question 19

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:

A)debit of $5,121.
B)credit of $4,895.
C)credit of $5,121.
D)debit of $4,895.

Question 20

Manikas Corporation has provided the following data concerning its most important raw material,compound V82T: When recording the purchase of materials,Raw Materials would be:

A)debited for $148,920.
B)credited for $149,650.
C)debited for $149,650.
D)credited for $148,920.

Question 21

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)debit of $427,567.
B)credit of $427,567.
C)debit of $386,595.
D)credit of $386,595.

Question 22

Henifin Corporation has provided the following data concerning its most important raw material,compound K91J:
The raw material was purchased on account.
$\begin{array}{llcc} \text {Standard cost, per liter......................................... } & \$43.10\\ \text { Standard quantity, liters per unit of output......... } &4.5\\ \text { Cost of material purchased in January, per liter... } &\$43.70\\ \text {Material purchased in January, liters.................... } &900\\ \text {Material used in production in January, liters....... } &510\\ \text { Actual output in January, units...........................} &100\\\end{array}$


-The Materials Price Variance for January would be recorded as a:

A)Credit of $540
B)Debit of $306
C)Credit of $306
D)Debit of $540

Question 23

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.
$\begin{array}{lcc}&\text { Standard Quantity or Hours }&\text { Standard Cost per Mip }\\ \text { Direct materials ...... } & 6 \text { board feet } & \$ 9.00 \\\text { Direct labor .......... } & 0.8 \text { hours } & \$ 9.60\end{array}$

-To record the use of direct materials in production,the general ledger would include what entry to the Materials Quantity Variance account?

A)$3,600 debit
B)$3,600 credit
C)$900 debit
D)$900 credit

Question 24

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:

A)credit of $6,390.
B)credit of $7,186.
C)debit of $7,186.
D)debit of $6,390.

Question 25

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.
$\begin{array}{lcc}&\text { Standard Quantity or Hours }&\text { Standard Cost per Mip }\\ \text { Direct materials ...... } & 6 \text { board feet } & \$ 9.00 \\\text { Direct labor .......... } & 0.8 \text { hours } & \$ 9.60\end{array}$

-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?

A)$240 credit
B)$240 debit
C)$340 debit
D)$340 credit

Question 26

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.

Question 27

Castanada Corporation has provided the following data concerning its direct labor costs for August:
$\begin{array}{c}\begin{array}{lll}\text {Standard wage rate.....................}\\\text { Standard hours..........................}\\\text { Actual wage rate....................... }\\\text {Actual hours.............................. }\\\text {Actual output...........................}\end{array}\begin{array}{r}\$ 10.40 \\3.4 \\\$ 11.20 \\23,640 \\6,300 \end{array}\begin{array}{l}\text {per DLH}\\\text {DLHs per unit}\\\text {per DLH}\\\text {DLHs}\\\text {units}\end{array}\end{array}$




-The Labor Rate Variance for August would be recorded as a:

A)Debit of $18,912
B)Credit of $18,912
C)Credit of $17,136
D)Debit of $17,136

Question 28

Castanada Corporation has provided the following data concerning its direct labor costs for August:
$\begin{array}{c}\begin{array}{lll}\text {Standard wage rate.....................}\\\text { Standard hours..........................}\\\text { Actual wage rate....................... }\\\text {Actual hours.............................. }\\\text {Actual output...........................}\end{array}\begin{array}{r}\$ 10.40 \\3.4 \\\$ 11.20 \\23,640 \\6,300 \end{array}\begin{array}{l}\text {per DLH}\\\text {DLHs per unit}\\\text {per DLH}\\\text {DLHs}\\\text {units}\end{array}\end{array}$




-The journal entry to record the incurrence of direct labor costs in August would include the following for Work in Process:

A)Debit of $222,768
B)Credit of $264,768
C)Credit of $222,768
D)Debit of $264,768

Question 29

Henifin Corporation has provided the following data concerning its most important raw material,compound K91J:
The raw material was purchased on account.
$\begin{array}{llcc} \text {Standard cost, per liter......................................... } & \$43.10\\ \text { Standard quantity, liters per unit of output......... } &4.5\\ \text { Cost of material purchased in January, per liter... } &\$43.70\\ \text {Material purchased in January, liters.................... } &900\\ \text {Material used in production in January, liters....... } &510\\ \text { Actual output in January, units...........................} &100\\\end{array}$


-The credits to the Raw Materials account for January would total:

A)$21,981
B)$19,395
C)$38,790
D)$39,330

Question 30

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. )

Question 31

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.
$\begin{array}{llcc} \text { Cost of material purchased in September, per ounce...... } &\$37.50 \\ \text {Material purchased in September, ounces....................... } &1,100\\ \text {Material used in production in September, ounces.......... } &810\\ \text { Actual output in September, units................................. } &100\\\end{array}$


-The credits to the Raw Materials account for September would total:

A)$30,560
B)$41,250
C)$30,942
D)$42,020

Question 32

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.
$\begin{array}{llcc} \text { Cost of material purchased in September, per ounce...... } &\$37.50 \\ \text {Material purchased in September, ounces....................... } &1,100\\ \text {Material used in production in September, ounces.......... } &810\\ \text { Actual output in September, units................................. } &100\\\end{array}$


-The debits to the Raw Materials account for September would total:

A)$41,250
B)$30,942
C)$30,560
D)$42,020

Question 33

Henifin Corporation has provided the following data concerning its most important raw material,compound K91J:
The raw material was purchased on account.
$\begin{array}{llcc} \text {Standard cost, per liter......................................... } & \$43.10\\ \text { Standard quantity, liters per unit of output......... } &4.5\\ \text { Cost of material purchased in January, per liter... } &\$43.70\\ \text {Material purchased in January, liters.................... } &900\\ \text {Material used in production in January, liters....... } &510\\ \text { Actual output in January, units...........................} &100\\\end{array}$


-The debits to the Raw Materials account for January would total:

A)$39,330
B)$21,981
C)$19,395
D)$38,790

Question 34

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.
$\begin{array}{llcc} \text { Cost of material purchased in September, per ounce...... } &\$37.50 \\ \text {Material purchased in September, ounces....................... } &1,100\\ \text {Material used in production in September, ounces.......... } &810\\ \text { Actual output in September, units................................. } &100\\\end{array}$


-The Materials Price Variance for September would be recorded as a:

A)Credit of $567
B)Credit of $770
C)Debit of $567
D)Debit of $770

Question 35

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.
$\begin{array}{lcc}&\text { Standard Quantity or Hours }&\text { Standard Cost per Mip }\\ \text { Direct materials ...... } & 6 \text { board feet } & \$ 9.00 \\\text { Direct labor .......... } & 0.8 \text { hours } & \$ 9.60\end{array}$

-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?

A)$480 credit
B)$240 debit
C)$1,200 debit
D)$1,200 credit

Question 36

The following standards have been established for a raw material used in the production of product N70:
The following data pertain to a recent month's operations:
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. )

Question 37

Henifin Corporation has provided the following data concerning its most important raw material,compound K91J:
The raw material was purchased on account.
$\begin{array}{llcc} \text {Standard cost, per liter......................................... } & \$43.10\\ \text { Standard quantity, liters per unit of output......... } &4.5\\ \text { Cost of material purchased in January, per liter... } &\$43.70\\ \text {Material purchased in January, liters.................... } &900\\ \text {Material used in production in January, liters....... } &510\\ \text { Actual output in January, units...........................} &100\\\end{array}$


-The Materials Quantity Variance for January would be recorded as a:

A)Credit of $2,586
B)Credit of $16,809
C)Debit of $16,809
D)Debit of $2,586

Question 38

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:

A)debit of $47,362.
B)debit of $48,158.
C)credit of $48,158.
D)credit of $47,362.

Question 39

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.
$\begin{array}{llcc} \text { Cost of material purchased in September, per ounce...... } &\$37.50 \\ \text {Material purchased in September, ounces....................... } &1,100\\ \text {Material used in production in September, ounces.......... } &810\\ \text { Actual output in September, units................................. } &100\\\end{array}$


-The Materials Quantity Variance for September would be recorded as a:

A)Debit of $382
B)Credit of $11,078
C)Credit of $382
D)Debit of $11,078

Question 40

Castanada Corporation has provided the following data concerning its direct labor costs for August:
$\begin{array}{c}\begin{array}{lll}\text {Standard wage rate.....................}\\\text { Standard hours..........................}\\\text { Actual wage rate....................... }\\\text {Actual hours.............................. }\\\text {Actual output...........................}\end{array}\begin{array}{r}\$ 10.40 \\3.4 \\\$ 11.20 \\23,640 \\6,300 \end{array}\begin{array}{l}\text {per DLH}\\\text {DLHs per unit}\\\text {per DLH}\\\text {DLHs}\\\text {units}\end{array}\end{array}$




-The Labor Efficiency Variance for August would be recorded as a:

A)Credit of $24,864
B)Debit of $24,864
C)Debit of $23,088
D)Credit of $23,088

Question 41

The following direct labor standards have been established for product K62G:
The following data pertain to the most recent month's operations during which 3,040 units of product K62G were made:
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.

Question 42

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.

Question 43

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.

Question 44

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.

Question 45

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.

Question 46

Schinkel Corporation has provided the following data concerning its most important raw material,compound X87C:
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.