Levine Inc., which produces a single product, has prepared the following standar

Question

Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. $20 $36 Direct materials (8 pounds at $2.50 per pound) Direct labor (3 hours at $12.00 per hour) During the month of April, the company manufactures 230 units and incurs the following actual costs. Direct materials purchased and used (1,900 pounds) $5,035 $8,120 Direct labor (700 hours) Journalize the entries to record the materials and labor variances. (Credit account titles are automatically indented when amount ise

Explanation / Answer

Journal Entries :-

Particulars Debit($) Credit($) Materials A/c Dr. (1900*$2.5) 4750 Materials Price Variance A/c (Bal.) 285 To Accounts Payable A/c (1900*$2.65) 5035 (To Record Materials Price Variance) Work in Process A/c Dr. (230*8*2.5) 4600 Materials Quantity Variance A/c Dr. (Bal.) 150 To Materials A/c (1900*2.50) 4750 (To Record Materials Quantity Variance) Direct Labor A/c Dr. (700*$12) 8400 To Labor Rate Variance A/c Dr. (Bal.) 280 To Wages Payable A/c(700*$11.6) 8120 (To Record Labor Rate Variance) Work in Process A/c Dr.(230*3*$12) 8280 Labor efficiency Variance A/c (Bal.) 120 To Direct Labor A/c (700*$12) 8400 (To Record Labor efficiency Variance)

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