mework Seved Help Save & Exit Check my Required information The following inform

Question

mework Seved Help Save & Exit Check my Required information The following information applies to the questions displayed below Hart Company made 3,000 bookshelves using 22,000 board feet of wood costing $266,200. The company's direct materials standards for one bookshelf are 8 board feet of wood at $12 per board foot. Hart Company records standard costs in its accounts and its materials variances in separate accounts when it assigns materials costs to the Work in Process Inventory account. (1) Prepare the journal entry that both charges the direct materials costs to the Work in Process Inventory account and records the materials variances in their proper accounts. (2) Assume that Hart's materials variances are the only variances accumulated in the accounting period and that they are immaterial Prepare the adjusting journal entry to close the variance accounts at period-end. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry that both charges the direct materials costs to the Work in Process Inventory account and records the materials variances in their proper accounts.

Explanation / Answer

working note:

first we shall calculate the variances:

direct material price variance:

actual quantity *(standard rate - actual rate)

here.

actual quantity = 22,000 board.

standard rate = $12.per board foot.

actual rate = $266,200 / 22,000 board feet => $12.10 per board foot.

direct material price variance = 22,000 board * ($12.- $12.10)

=>$2,200 (unfavorable).

direct material quantity variance :

standard price *(actual quantity - standard quantity)

standard price = $12

actual quantity= 22,000 board feet.

standard quantity = 3,000 book shelf * 8 board feet => 24,000 board feet.

$12*(22,000 - 24,000)

=>$24,0000 (favourable).

now the below are the journal entries:

Transaction

2.

Transaction

Accounts Debit Credit 1 Goods in process inventory $288,000 Direct material price variance $2,200 ............To Direct material quantity variance $24,000 .............To Raw material inventory $266,200 (To record variances)

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.