Answer and Explanation:
The Journal entry is shown below :-
1. Raw Materials Inventory Dr, $46,540
Materials Price Variance Dr, $3,580
To Accounts Payable $50,120
(Being accounts payable is recorded)
Working note
Materials price variance = (Actual price - Standard Price) × Actual Quantity
= ($2.80 - $2.60) × 17,900
= $3,580 Unfavorable
Raw Material = Actual Quantity × Standard Price
= 17,900 × $2.60
= $46,540
Accounts Payable = Actual Quantity × Actual price
= 17,900 × $2.80
= $50,120
2. Work in Process Inventory Dr, $45,552
Materials Quantity Variance Dr, $988
To Raw Materials Inventory $46,540
(Being raw material inventory is recorded)
Working Note
Materials quantity variance = (Actual Quantity Used- Standard Quantity) × Standard Price
= (17,900 - 17,520) × $2.60
= $988 Unfavorable
Work in Process Inventory = Standard Quantity × Standard Price
= 17,520 × $2.60
= $45,552
Raw Material = Actual Quantity × Standard Price
= 17,900 × $2.60
= $46,540
3. Factory Labor Dr, $78,000
To Labor Price Variance $6,000
To Factory Wages Payable $72,000
(Being factory labor is recorded)
Working Note:-
Labor price variance = (Actual Rate - Standard Rate) × Actual Hour
= ($4.80 - $5.20) × 15,000
= $6,000 Favorable
Factory labor = Standard Rate × Actual Hour
= $5.20 × 15,000
= $78,000
Factory Wages Payable = Actual Rate × Actual Hour
= $4.80 × 15,000
= $72,000
4. Work in Process Inventory Dr, $79,040
To Labor Quantity Variance $1,040
To Factory Labor $78,000
(Being work in progress is recorded)
Working note
Labor Quantity variance = (Actual Hour - Standard Hour) × Standard Rate
= (15,000 - 15,200) × $5.20
= $1,040
Work in Process Inventory = Standard Hour × Standard Rate
= 15,200 × $5.20
= $79,040
Factory Labor = Actual Hour × Standard Rate
= 15,000 × $5.20
= $78,000
5. Work in Process Inventory Dr, $79,040
To Manufacturing Overhead $79,040
(Being manufacturing overhead is recorded)
