Cost Management: A Strategic Emphasis 7th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 50

Standard Cost in Process Costing; All Variances and Journal Entries Dash Company adopted a standard costing system several years ago. The standard costs for the prime costs (i.e., direct materials and direct labor) of its single product are:

All materials are added at the beginning of processing. The following data were taken from the company's records for November:

Required
1. Compute for November (show calculations):
a. The labor efficiency variance.
b. The labor rate variance.
c. The actual number of kilograms of material used in the production process during the month.
d. The actual price paid per kilogram of material during the month.
e. The amount of direct material cost and direct labor cost transferred to the Finished Goods account.
f. The total amount of direct material and direct labor cost in the Work-in-Process Inventory account at the end of the month.
2. Prepare journal entries to record all transactions, including the variances in requirement 1.
(CMA Adapted)