Exercise 11-13 The Clinton Cabinet Company uses a standard costing system and pr
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Question
Exercise 11-13 The Clinton Cabinet Company uses a standard costing system and produced 2,130 cabinets during May. The standard cost of wood is $21 per linear foot, and the standard quantity for each cabinet is 27 linearfeet. During May, the company purchased 54,800 linear feet of wood for $986,400, and 57,700 feet were used in production. The company purchases all materials on account. Determine the material price variance and the material quantity variance. (Enter all variances as a positive number.) Material Price Variance 6390Favorable Material Quantity Variance s 990 Unfavorable SHOW LIST OF ACCOUNTS LINK TO TEXTExplanation / Answer
Material price variance = (standard price-actual price)actual qty
= (21*54800-986400)
Material price variance = 164400 Favourable
Material usage variance = (standard quantity-actual quantity)standard price
= (2130*27-57700)21
Material usage variance = 3990 Unfavoruable
Journal entries :
Date accounts & explanation debit credit Raw material inventory a/c 1150800 Material price variance 164400 Account payable a/c 986400 (To record purchase of raw material) Work in process inventory 1207710 Material quantity variance 3990 Raw material inventory 1211700 (To record material used in production)Related Questions
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