Deck 24: Journal Entries to Record Variances

Question 1

A favorable labor efficiency variance is recorded as a credit in the Labor Efficiency Variance account.

Answer 1

True

Question 2

Dolittle Company purchased materials on account.The entry to record the purchase of materials having a standard cost of $0.50 per pound from a supplier at $0.60 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 2

D

Question 3

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

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

Answer 3

D

Question 4

When the actual amount of a raw material used in production is greater 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 5

A favorable labor rate variance is recorded as a debit in the Labor Rate Variance account.

Question 6

Gotay Corporation's standard wage rate is $12.00 per direct labor-hour (DLH)and according to the standards,each unit of output requires 5.8 DLHs.In December,4,900 units were produced,the actual wage rate was $11.00 per DLH,and the actual hours were 27,870 DLHs.The Labor Rate Variance for December would be recorded as a:

A)debit of $28,420.
B)credit of $28,420.
C)credit of $27,870.
D)debit of $27,870.

Question 7

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:

A)credit of $19,440.
B)credit of $21,168.
C)debit of $19,440.
D)debit of $21,168.

Question 8

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:

A)debited for $55,930.
B)debited for $54,264.
C)credited for $55,930.
D)credited for $54,264.

Question 9

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

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

Question 10

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 debit.

Question 11

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:

A)credit of $1,644.
B)credit of $1,728.
C)debit of $1,728.
D)debit of $1,644.

Question 12

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:

A)$2.15
B)$1.96
C)$2.26
D)$2.05

Question 13

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.

Question 14

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.

Question 15

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

Question 16

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.

Question 17

If the actual purchase price for materials exceeds the standard purchase price,then the journal entry to record the Direct Materials Price Variance would be a debit.

Question 18

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

A)
B)
C)
D)

Question 19

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

A)debit of $54,634.
B)debit of $57,875.
C)credit of $54,634.
D)credit of $57,875.

Question 20

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:

A)credited for $49,950.
B)credited for $51,300.
C)debited for $49,950.
D)debited for $51,300.

Question 21

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 credits to the Raw Materials account for October would total:

A)$52,440
B)$48,760
C)$52,900
D)$53,130

Question 22

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?

A)$9,500 credit
B)$9,500 debit
C)$15,200 debit
D)$2,000 debit

Question 23

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:

A)Credit of $3,680
B)Debit of $4,140
C)Credit of $4,140
D)Debit of $3,680

Question 24

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:

A)$52,900
B)$52,440
C)$48,760
D)$53,130

Question 25

Karo Corporation has provided the following data concerning its direct labor costs for December:

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

A)Credit of $9,086
B)Debit of $9,086
C)Credit of $8,428
D)Debit of $8,428

Question 26

Karo Corporation has provided the following data concerning its direct labor costs for December:

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

A)Debit of $9,682
B)Debit of $10,340
C)Credit of $10,340
D)Credit of $9,682

Question 27

Bordes Corporation has provided the following data concerning its most important raw material, compound R85F: The raw material was purchased on account.

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

A)$75,240
B)$77,880
C)$58,596
D)$53,808

Question 28

Compound V11V is used to make Hickenbottom Corporation's major product.The standard cost of V11V is $21.50 per ounce and the standard quantity is 3.6 ounces per unit of output.In the most recent month,1,600 ounces of the raw material were purchased at a cost of $21.00 per ounce.When recording the purchase of materials,Raw Materials would be:

A)credited for $34,400.
B)credited for $33,600.
C)debited for $34,400.
D)debited for $33,600.

Question 29

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?

A)$7,500 credit
B)$5,600 debit
C)$5,600 credit
D)$3,900 credit

Question 30

Stanfa Corporation's standard wage rate is $10.50 per direct labor-hour (DLH)and according to the standards,each unit of output requires 8.0 DLHs.In January,3,700 units were produced,the actual wage rate was $10.80 per DLH,and the actual hours were 25,280 DLHs.In the journal entry to record the incurrence of direct labor costs in January,the Work in Process entry would consist of a:

A)debit of $310,800.
B)credit of $273,024.
C)credit of $310,800.
D)debit of $273,024.

Question 31

Bordes Corporation has provided the following data concerning its most important raw material, compound R85F: The raw material was purchased on account.

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

A)Debit of $4,788
B)Debit of $16,644
C)Credit of $4,788
D)Credit of $16,644

Question 32

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?

A)$14,000 credit
B)$14,000 debit
C)$10,000 credit
D)$10,000 debit

Question 33

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:

A)$58,596
B)$75,240
C)$53,808
D)$77,880

Question 34

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

A)debit of $341,658.
B)credit of $341,658.
C)credit of $294,174.
D)debit of $294,174.

Question 35

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 Price Variance for October would be recorded as a:

A)Debit of $230
B)Credit of $212
C)Debit of $212
D)Credit of $230

Question 36

Bordes Corporation has provided the following data concerning its most important raw material, compound R85F: The raw material was purchased on account.

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

A)Credit of $2,056
B)Debit of $2,640
C)Debit of $2,056
D)Credit of $2,640

Question 37

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 use of direct materials in production,the general ledger would include what kind of entry to the Materials Quantity Variance Account?

A)$46,000 debit
B)$60,000 credit
C)$60,000 debit
D)$36,000 debit

Question 38

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.

-Odle Company purchased material on account.The entry to record the purchase of materials will include a:

A)credit to Work in Process.
B)debit to Accounts Receivable.
C)credit to Accounts Payable.
D)credit to Raw Materials Inventory.

Question 39

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:

A)Credit of $142,780
B)Debit of $142,780
C)Debit of $124,012
D)Credit of $124,012

Question 40

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:

A)credited for $123,235.
B)debited for $123,235.
C)debited for $104,615.
D)credited for $104,615.

Question 41

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 Efficiency Variance for May would be recorded as a:

A)debit of $29,512.
B)credit of $28,520.
C)credit of $29,512.
D)debit of $28,520.

Question 42

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.

-In the journal entry to record the incurrence of direct labor costs in May,the Work in Process entry would consist of a:

A)credit of $155,295.
B)debit of $155,295.
C)credit of $178,595.
D)debit of $178,595.

Question 43

The standards for product J42 call for 3.6 feet of a raw material that costs $14.00 per feet.Last month,5,500 feet of the raw material were purchased for $76,175.The actual output of the month was 1,260 units of product J42.A total of 4,800 feet 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 44

The standards for product A22G specify 8.2 direct labor-hours per unit at $11.90 per direct labor-hour.Last month 200 units of product A22G were produced using 1,700 direct labor-hours at a total direct labor wage cost of $20,060.

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 45

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:

A)debit of $5,220.
B)credit of $6,212.
C)credit of $5,220.
D)debit of $6,212.

Question 46

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.

Question 47

The following standards have been established for a raw material used in the production of product O99:
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 48

The following direct labor standards have been established for product H91D:
The following data pertain to the most recent month's operations during which 3,860 units of product H91D 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 49

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.

Question 50

Compound Y23Z is used by Mcfadin Corporation to make one of its products.The standard cost of compound Y23Z is $38.70 per ounce and the standard quantity is 4.6 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 51

The Lahn Company produces and sells a single product.Standards have been established for the product as follows:

Direct materials: 5 pounds $3.50 per pound = $17.50
Direct labor: 3 hours $5.50 per hour = $16.50

Actual cost and usage figures for the past month follow:
Required:
Prepare journal entries to record:
a.The purchase of raw materials.
b.The usage of raw materials in production.
c.The incurrence of direct labor cost.

Question 52

Dullen Corporation has provided the following data concerning its most important raw material,compound I51D:
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.