[The following information applies to the questions displayed below.] Canandaigu

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[The following information applies to the questions displayed below.]

Canandaigua Container Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller.

Actual material purchases amounted to 112,000 kilograms at $0.400 per kilogram. Actual costs incurred in the production of 16,000 units were as follows:

8.Prepare the following journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) Designate a credit or debit. Designate one of the following: No journal entry required, accounts payable, cost of finished goods, or cost of goods sold.

Record the purchase of direct material on account and the direct-material purchase price variance.

Record the addition of direct-material cost to work-in-process inventory and direct-material quantity variance.

Record the addition of direct-labor cost to work-in-process inventory and the direct-labor variances.

Record the closing of the direct materail and direct labor variances to cost of goods sold.

value:
10.00 points

Required information

Canandaigua Container Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller.

Explanation / Answer

JOURNAL ENTRY Account Title Debit Credit Pirchase of direct material on account: Direct materials inventory $        40,320 (112000*0.36) Direct materials price variance $          4,480 (112000*(0.4-0.36) Accounts payable $        44,800 (112000*0.4) Addition of direct material cost to WIP: Work in Process $        34,560 (6*16000*0.36) Direct material quantity variance $          1,440 (0.36*(100000-96000) Direct material inventory $        36,000 (100000*0.36) Addition of direct labor cost to WIP: Work in process $        13,520 (16000*0.13*6.5) Direct labor rate variance $              600 (2400*(16200/2400)-6.5))=2400*(6.75-6.5) Direct labor efficiency variance $          2,080 6.5*(2400-(16000*0.13))=6.5*(2400-2080) Wages payable $16,200 Closing of Variances Cost of goods sold $          8,120 Direct materials price variance $          4,000 (100000*(0.4-0.36) Direct materials quantity variance $          1,440 Direct labor rate variance $              600 Direct labor efficiency variance $          2,080

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