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jarptica [38.1K]
3 years ago
15

Making journal entries Assume that during the month of April the production report of Austin Adhesives, Inc., in E8-10 revealed

the following information:_______. Units produced during the month . . . .......................... 21,000 Direct labor hours for the month . . . . . . . . . . . . . . . . . .41,000 Materials purchased (in pounds) . . . . . ..................... 130,000 Materials used (in pounds) ........................................ 125,000 Labor rate per hour ..................................................... $10.04 Materials cost per pound . . . . . . . . . ........................... $ 1.98 Make journal entries to charge materials (use the materials purchase price variance) and labor to Work in Process. (Remember to retrieve the standard costs)
Business
1 answer:
Alex_Xolod [135]3 years ago
6 0

Missing Information:

The normal capacity of  is 40,000 direct labor hours and 20,000 units per month. A finished unit requires 6 lb of materials at an estimated cost of $2 per pound. The estimated cost of labor is $10.00 per hour.

Answer:

Raw materials Inventory   260,000 debit  

D:M price variance                2,600 debit

     Account Payable                   257,400 credit

--to record the purchase ---

WIP-Inventory          248,000 debit

DM quality variance    2,000 debit

       Raw materials Inventory   250,000 debit

--to record requisition of materials--

WIP-Inventory    420,000 debit

D:L rate variance    1,640 debit

    Wages Payables             411,640 credit

    DL efficiency variance     10,000 credit

--to record the charge of labor into WIP--

Explanation:

130,000 pounds x $1.98 (actual)      = $257,400‬

130,000 pounds x $2.00 (standard) = $260,000

variance 2,600 favorable

Quantity Variance:

actual: 125,000 x $2 = 250,000

standard:  21,000 x 6 = 124,000 pounds x $2 = 248,000

variance: 2,000 unfavorable  

41,000 hours x $10.04 each = $411,640

41,000 hours x $10.00 each = $410,000

rate variance 1,640 unfavorable

efficiency variance:

21,000 x 2 hours = 42,000 hours x $10 = 420,000

actual 41,000 x $10 = 410,000

favorable 10,000

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For quarters 1, 2, 3 and 4 of year 202x

                                       Q1                     Q2                  Q3                Q4

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For quarters 1, 2, 3 and 4 of year 202x

                                       Q1                     Q2                  Q3                Q4

Sales revenue                $0                    $0                $550            $600

Cost of goods man.  ($1,000)                $0                   $0               $0

Net cash receipts     ($1,000)                 $0                $550            $600

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