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insens350 [35]
3 years ago
14

Material and Labor Variances The following actual and standard cost data for direct material and direct labor relate to the prod

uction of 2,000 units of a product: Actual Costs Standard Costs Direct material 3,900 lbs. @ $5.30 4,000 lbs. @ $5.10 Direct labor 6,200 hrs. @ $8.40 6,000 hrs. @ $8.70 Determine the following variances: Do not use negative signs with any of your answers. Next to each variance answer, select either "F" for Favorable or "U" for Unfavorable. Materials Variances Actual cost: Answer Split cost: Answer Standard cost: Answer a. Materials price Answer Answer b. Materials efficiency Answer Answer Labor Variances Actual cost: Answer Split cost: Answer Standard cost: Answer c. Labor rate Answer Answer d. Labor efficieny Answer Answer
Business
1 answer:
Damm [24]3 years ago
4 0

Answer:

Materials:

price     800U

quantity 510 F

Labor:

rate          1,860 F

efficiency 1,740 U

Explanation:

DIRECT MATERIALS VARIANCES

(standard\:cost-actual\:cost) \times actual \: quantity= DM \: price \: variance

std cost           $5.10

actual cost  $5.30

quantity          4,000

(5.1 - 5.3) \times 4,000 = DM \: price \: variance

price variance  $(800.00)

(standard\:quantity-actual\:quantity) \times standard \: cost = DM \: quantity \: variance

std quantity 4000.00

actual quantity 3900.00

std cost  $5.10

(4,000 - 3,900) \times 5.1 = DM \: quantity \: variance

quantity variance  $510.00

DIRECT LABOR VARIANCES

(standard\:rate-actual\:rate) \times actual \: hours = DL \: rate \: variance

std rate  $8.70

actual rate  $8.40

actual hours 6,200

(8.7 - 8.4) \times 6,200 = DL \: rate \: variance

rate variance  $1,860.00

(standard\:hours-actual\:hours) \times standard \: rate = DL \: efficiency \: variance

std  hours 6000.00

actual hours 6200.00

std rate  $8.70

(6,000 - 6,200) \times 8.70 = DL \: efficiency \: variance

efficiency variance  $(1,740.00)

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Port Ormond Carpet Company manufactures carpets. Fiber is placed in process in the Spinning Department, where it is spun into ya
sammy [17]

Answer:

Port Ormond Carpet Company

1. Journal Entries:

Jan. 31 Debit Materials $500,000

Credit Accounts payable $500,000

To record the purchase of materials on account.

Jan. 31 Debit Work-in-Process - Spinning $275,000

Credit Materials $275,000

To record the materials requisitioned.

Jan. 31 Debit Work-in-Process -Tufting $110,000

Credit Materials $110,000

To record carpet backing

Jan. 2 Debit Factory Overhead - Spinning $46,000

Debit Factory Overhead - Tufting $39,500

Credit Materials $85,500

To record indirect materials used.

Jan. 31 Debit Work-in-Process - Spinning $185,000

Debit Work-in-Process - Tufting $98,000

Credit Factory Payroll $283,000

To record direct labor costs.

Jan 31: Debit Overhead - Spinning $18,500

Debit Overhead - Tufting $9,000

Credit Factory Payroll $27,500

To record indirect labor costs.

Jan. 31: Debit Factory Overhead - Spinning $12,500

Debit Factory Overhead - Tufting $8,500

Credit Factory Depreciation Expense $21,000

To record depreciation costs.

Jan. 31:

Debit Factory Overhead - Spinning $2,000

Debit Factory Overhead - Tufting $1,000

Credit Factory Insurance $3,000

To record insurance costs.

Jan. 31 Debit Work-in-Process - Spinning $80,000

Credit Factory Overhead - Spinning $80,000

To record overhead costs applied.

Jan. 31 Debit Work-in-Process - Tufting $55,000

Credit Factory Overhead $55,000

To record overhead costs applied.

Jan. 31 Debit Work-in-Process - Tufting $547,000

Credit Work-in-Process - Spinning $547,000

To record the transfer to Tufting department.

Jan. 31 Debit Finished Goods Inventory $807,200

Credit Work-in-Process- Tufting $807,200

To record the transfer to Finished Goods.

Jan. 31 Debit Cost of Goods Sold $795,200

Credit Finished Goods $795,200

To record the cost of goods sold.

2. January 31 balances of the inventory accounts:

Finished Goods = $74,000

Work-in-Process - Spinning = $28,000

Work-in-Process - Tufting = $31,300

Materials = $46,500

3. Factory Overhead Accounts Balances:

Spinning $1,000 (Debit)  

Tufting $3,000 (Credit)

Explanation:

a) Data and Calculations:

January 1 Inventories:

Finished Goods = $62,000

Work in Process- Spinning = $35,000

Work in Process - Tufting = $28,500

Materials = $17,000

Finished Goods

Account Titles                                Debit      Credit

Jan. 1 Beginning balance           $62,000

Jan. 2 Work-in-Process-Tufting 807,200

Jan. 31 Cost of Goods Sold                     $795,200

Jan. 31 Ending balance                                74,000

Work-in-Process - Spinning

Account Titles                   Debit      Credit

Beginning balance        $35,000

Jan. 2 Materials            275,000

Jan. 31 Direct labor       185,000

   Applied overhead      80,000

    Work-in-Process -Tufting        $547,000

Jan. 31 Ending balance                   28,000    

Work-in-Process - Tufting

Account Titles                             Debit      Credit

Jan. 1 Beginning balance        $28,500

Jan. 2 Carpet backing              110,000

Jan. 31 Direct labor                   98,000

 Jan. 31 Applied overhead        55,000

Jan. 31 WIP- Spinning            547,000

Jan. 31 Finished Goods                        $807,200

Jan. 31 Ending balance                              31,300

Cost of Goods Sold

Account Titles                             Debit      Credit

Jan. 31 Finished Goods       $795,200

Materials

Account Titles                            Debit       Credit

Jan. 1 Beginning balance         $17,000

Jan. 2 Accounts payable       500,000

Jan. 31 Work-in-Process - Spinning           $275,000

Jan. 31 Work-in-Process - Spinning               46,000

Jan. 31 Factory Overhead - Tufting               39,500

Jan. 31 Factory Overhead - Tufting              110,000

Jan. 31 Ending balance                                  46,500

Factory Overhead - Spinning

Account Titles                                    Debit      Credit

Jan. 31 Materials - Spinning             46,000

Jan. 31 Payroll - Spinning                  18,500

Jan. 31 Depreciation - Spinning       12,500

Jan. 31 Factory insurance-Spinning 2,000

Jan. 31 Work in Process                                  80,000

Jan. 31 Balance                                  1,000

Factory Overhead - Tufting

Account Titles                                    Debit      Credit

Jan. 31 Materials - Tufting                39,500

Jan. 31 Payroll - Tufting                      9,000

Jan. 31 Depreciation - Tufting           8,500

Jan. 31 Factory insurance- Tufting    1,000

Jan. 31 Work in Process                                   55,000

Jan. 31 Balance                                                   3,000

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Answer:

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Explanation:

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