Exercise 11-13 The Granger Cabinet Company uses a standard costing system and pr
ID: 2578183 • Letter: E
Question
Exercise 11-13 The Granger Cabinet Company uses a standard costing system and produced 1,830 cabinets during May. The standard cost of wood is $22 per linear foot, and the standard quantity for each cabinet is 29 linear feet. During May, the company purchased 61,500 linear feet of wood for $1,230,000, and 58,500 feet were used in production. The company purchases all materials on account. Determine the material price variance and the material quantity variance. (Enter all varlances as a positive number.) Material Price Variance Material Quantity Variance s SHOW LIST OF ACCOUNTS LINK TO TEXT Record the related journal entries for May. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) 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 qty
= (22*61500-1230000)
Material price variance = 123000 Favourable
Material usage variance = (standard quantity-actual quantity)standard price
= (1830*29-58500)22
Material usage variance = 119460 Unfavoruable
Journal entries :
Date accounts & explanation debit credit Raw material inventory a/c 1353000 Material price variance 123000 Account payable a/c 1230000 (To record purchase of raw material) Work in process inventory 1167540 Material quantity variance 119460 Raw material inventory 1287000 (To record material used in production)Related Questions
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