Viking Corp. uses a standard cost system to account for the costs of its one pro

Question

Viking Corp. uses a standard cost system to account for the costs of its one products. Material standards are 13 pounds of material at $1.80 per pound and 3 hours of labor at a standard wage rate of $13.7. During NNovember, Viking Corp. produced and sold 2,600 units. Material purchases totaled 34,010 pounds at a total cost of $61,658. Material usage totaled 33,870 pounds. Payroll totaled $108,556 for 8,080 hours worked. Viking Corp. does not maintain inventories other than direct materials. Prepare journal entries to record the transactions.

Explanation / Answer

Materials inventory (34010*1.80) = 61218 Direct material price variance 440 Accounts payable 61658 (To record purchase of direct materials) WIP inventory (2600*13*1.8) 60840 Direct material quantity variance 126 Materials inventory (33870*1.8) 60966 (To record usage of direct materials) WIP inventory (2600*3*13.7) 106860 Direct labor efficiency variance = (8080-2600*3)*13.7 = 3836 Direct labor rate variance = (108556-8080*13.7) = 2140 Cash 108556

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