Required information Journal Entries under Standard Costing (Appendix), Posting
ID: 2570233 • Letter: R
Question
Required information Journal Entries under Standard Costing (Appendix), Posting Journal Entries for Variances (Appendix) (LO 10-6, 10-9) The following information applies to the questions displayed below.] Saskatewan Can 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. Direct Labor: Direct Material: Quantity, 0.21 hour Rate, $10.50 per hourPrice, $0.52 per kilogram Quantity, 4 kilograms Actual material purchases amounted to 185,600 kilograms at $0.60 per kilogram. Actual costs incurred in the production of 32,000 units were as follows: Direct labor: Direct material: $77,088 for 7,040 hours $85,440 for 142,400 kilograms Exercise 10-31 Required 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.)Explanation / Answer
Direct material price variance = Actual Quantity used x (Standard price-Actual price)
=142400 x (0.52-0.60)=
11392
Unfavorable
Standard quantity for actual production = 32000*4=
128000
Direct material quantity variance = Standard price*(Standard quantity-Actual Quantity)
=0.52*(128000-142400)=
7488
Unfavorable
Direct material purchase price variance = Actual Quantity purchased*(Standard price-Actual price)
=185600*(0.52-0.60)=
14848
Unfavorable
Actual labor rate = 77088/7040=
10.95
Direct labor rate variance = Actual hours*(Standard rate-Actual rate)
=7040*(10.50-10.95)=
3168
Unfavorable
Standard hours for actual production = 32000*0.21=
6720
Direct labor efficiency variance = Standard rate*(Standard hours-Actual hours)
=10.50*(6720-7040)=
3360
Unfavorable
Direct material price variance = Actual Quantity used x (Standard price-Actual price)
=142400 x (0.52-0.60)=
11392
Unfavorable
Standard quantity for actual production = 32000*4=
128000
Direct material quantity variance = Standard price*(Standard quantity-Actual Quantity)
=0.52*(128000-142400)=
7488
Unfavorable
Direct material purchase price variance = Actual Quantity purchased*(Standard price-Actual price)
=185600*(0.52-0.60)=
14848
Unfavorable
Actual labor rate = 77088/7040=
10.95
Direct labor rate variance = Actual hours*(Standard rate-Actual rate)
=7040*(10.50-10.95)=
3168
Unfavorable
Standard hours for actual production = 32000*0.21=
6720
Direct labor efficiency variance = Standard rate*(Standard hours-Actual hours)
=10.50*(6720-7040)=
3360
Unfavorable
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