Rip Tide Company manufactures surfboards. Its standard cost information follows:

Question

Rip Tide Company manufactures surfboards. Its standard cost information follows:

Rip Tide has the following actual results for the month of June:

Required:
1 & 2. Prepare the journal entries to record the direct materials, direct labor costs and related variances for Rip Tide. Assume the company purchases raw materials as needed and does not maintain any ending inventories. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations and round your final answers to nearest dollar amount.)

Record the entry for direct materials costs and variances.   Record the entry for direct labor costs and variance.

Standard Quantity Standard Price (Rate) Standard Unit Cost Direct materials (fiberglass) 10.2 sq. ft. $ 4.6 per sq. ft. $ 46.92 Direct labor 9.5 hrs. $ 13 per hr. 123.50 Variable manufacturing overhead (based on direct labor hours) 9.5 hrs. $ 5 per hr. 47.50 Fixed manufacturing overhead ($37,000 ÷ 305 units) 121.31

Explanation / Answer

Record the entry for direct materials costs and variances.   Record the entry for direct labor costs and variance.

Date accounts & explanation debit credit Work in process (160*46.92) 7507.20 Material rate variance 3540 Material quantity variance 19632.8 Account payable 30680 (To record material cost and variance) Work in process (160*123.50) 19760 Labour rate variance 1022 Labour efficiency variance 780 wages payable 20002 (To record labour cost and variance)

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