Wannabe Corporation makes a product with the following standard costs for direct

Question

Wannabe Corporation makes a product with the following standard costs for direct materials and direct abour Direct materials: 1.90 metres at $6. 70 per metre 12.73 Direct labour. 0.35 hours at $17.00 per hour $ 595 During the most recent month, 10000 units were produced The costs associated with the month s production of this product were as follows Materials purchased 19 500 metres at $7.00 per metre 136.500 Materials used in production: 17 400 metres Direct labour 2.540 hours at $17.75 per hour S45.085 The standard cost variances for direct matenials and direct labour are as follows Materials price variance 19,500 metres at $0 30 per metre U Materials quantity variance 1.600 metres at $6 70 per metre F Labour rate variance 2 540 hours at $0.75 per hour U Labour efficiency variance 960 hours at 517.00 per hour F S 5850 U $ 10,720 F S 1905 U S 16.320 F Required 1. Prepare the journal entry to record the purchase of materia's on account for the month.

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit Raw material (19500*6.7) 130650 Material price variance 5850      Account payable 136500 (To record raw material purchase on account)

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