Cmipter 18 Standard Costs and mnrane rate of STANDARD COSTING QUESTIONS: Answer
ID: 2336310 • Letter: C
Question
Cmipter 18 Standard Costs and mnrane rate of STANDARD COSTING QUESTIONS: Answer the follow ing unrelated questions a.) The following materials standards have been established for a particular product Standard quantity per unit of output 1.7 metres Standard price S19.80 per metre The followin g data pertain to operations concerning the product for the last month Actual materials purchased Actual cost of materials purchased Actual materials used in production Actual output 5,800 m etres S113,680 5, 100 metres 3,200 unit Calculate the material variance and record the journal entries for price and quantity variances separately APExplanation / Answer
Solution a:
Standard price of material = $19.80 per meter
Standard quantity of material for actual production = 3200*1.7 = 5440 meters
Actual quantity of material purchased = 5800 meters
Actual price of material = $113,680 / 5800 = $19.60 per meter
Actual quantity of material consumed = 5100 meter
Material price variance = (SP - AP) * AQ purchased = ($19.80 - $19.60) * 5800 = $1,160 F
Material quantity variance = (SQ - AQ) * SP = (5440 - 5100)* $19.80 = $6,732 F
Solution b:
Standard hours for actual production = 9000*2.5 = 22500 hours
Standard rate of labor = $8 per hour
Labor efficiency variance = $8,000 F
(SH - AH) * SR = $8,000
(22500 - AH) * $8 = $8,000
AH = 21500 hours
Therefore actual number of hours worked is 21500 hours
Journal Entries Event Particulars Debit Credit 1 Material inventory Dr (5800*$19.80) $114,840.00 To Accounts payable $113,680.00 To Material price variance $1,160.00 (To record purchase of material) 2 Work In Process Dr (5440*$19.80) $107,712.00 To Material inventory (5100*19.80) $100,980.00 To Material quantity variance $6,732.00 (To record material used in production)Related Questions
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