The Marx Cabinet Company uses a standard costing system and produced 2,200 cabin
ID: 2577416 • Letter: T
Question
The Marx Cabinet Company uses a standard costing system and produced 2,200 cabinets during May. The standard cost of wood is $20 per linear foot, and the standard quantity for each cabinet is 26 linear feet. During May, the company purchased 53,500 linear feet of wood for $963,000, and 58,100 feet were used in production. The company purchases all materials on account.
Material Price Variance Material Quantity Variance SHOW LIST OF ACCOUNTS LINK TO TEXT Record the related journal entries for May. (Credit account titles are automatically indented when No. Account Titles and Explanation Debit Credit 1. To record material purchases) 2. (To record material used in production)Explanation / Answer
Material price variance = (standard price-actual price)actual quantity
= (20*53500-963000)
Material price variance = 107000 F
Material Quantity variance = (standard qty-actual quantity)standard price
= (2200*26-58100)20
Material quantity variance = 18000 U
Journal entry :
date accounts & explanation debit credit Raw material a/c (53500*20) 1070000 Material price variance 107000 Account payable a/c 963000 (To record material puchase) Work in process a/c 1144000 Material quantity Variance 18000 Raw material a/c 1162000 (To record material used in production)Related Questions
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