Santa Corp. determines that the following variances arose in production during O
ID: 2381978 • Letter: S
Question
Santa Corp. determines that the following variances arose in production during October:
Variance
Materials price.............2,400 Unf
Materials quantity..........1,000 Fav
Labor efficiency............ 500 Fav
Labor rate....................750 Fav
Factory overhead efficiency...850 Unf
Factory overhead spending....2,100 Un
Materials purchases totaled $90,000, while $77,000 in materials were
taken from inventory for use in production.
Labor payroll totaled $144,000, and actual overhead incurred was
$256,000.
REQUIRED: Prepare journal entries to record the above variances.
Santa Corp. determines that the following variances arose in production during October:
Variance
Materials price.............2,400 Unf
Materials quantity..........1,000 Fav
Labor efficiency............ 500 Fav
Labor rate....................750 Fav
Factory overhead efficiency...850 Unf
Factory overhead spending....2,100 Un
Materials purchases totaled $90,000, while $77,000 in materials were
taken from inventory for use in production.
Labor payroll totaled $144,000, and actual overhead incurred was
$256,000.
REQUIRED: Prepare journal entries to record the above variances.
Explanation / Answer
Hi,
Please find the answer as follows:
Materials Dr. 90000
Materials Purchase Price Variance Cr. 2400
Accounts Payable Cr. 87600
Work in Process Dr. 78000
Materials Cr. 77000
Materials Quantity Variance Cr. 1000
Work in Process Dr. 143750
Labor Rate Variance Dr. 750
Payroll Cr. 144000
Labor Efficiency Variance Cr. 500
Factory Overhead Control Dr. 256000
Various Credits Cr. 256000
Work in Process Dr. 254750
Factory Overhead Controllable Variance Dr. 2950
Factory Overhead Control Cr. 256000
Factory Overhead Volume Variance Cr. 1700
Thanks.
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