Question

Vista Company installed a standard cost system on January 1. Selected transactions for the month of January are as follows.

Answer 1

Answer:

1. Dr Raw Materials Inventory $69,920

Dr Materials Price Variance $1,840

Cr Accounts Payable $71,760

2. Dr Work in Process Inventory $68,780

Dr Materials Quantity Variance $1,140

Cr Raw Materials Inventory $69,920

3. Dr Factory Labor $73,600

Cr Labor Price Variance $8,000

Cr Factory Wages Payable $65,600

4. Dr Work in Process Inventory $74,474

Cr Labor Quantity Variance $874

Cr Factory Labor $73,600

5. Dr Work in Process Inventory $143,254

Cr Manufacturing Overhead $143,254

Explanation:

Preparation of the anuary transactions

1. Dr Raw Materials Inventory $69,920

(18,400*$3.80)

Dr Materials Price Variance $1,840 [18,400 x ($3.90 - $3.80)]

Cr Accounts Payable $71,760

($69,920+$1,840)

2. Dr Work in Process Inventory $68,780

(18,100*$3.80)

Dr Materials Quantity Variance $1,140 [$3.80 x (18,400 - 18,100)]

Cr Raw Materials Inventory $69,920

(18,400*$3.80)

3. Dr Factory Labor $73,600

($16,000*$4.60)

Cr Labor Price Variance $8,000

[16,000 x ($4.10 - $4.60)]

Cr Factory Wages Payable $65,600

(16,000*$4.10)

4. Dr Work in Process Inventory $74,474

(16,190*$4.60)

Cr Labor Quantity Variance $874 [$4.60 x (16,000 - 16,190)]

Cr Factory Labor $73,600

($8,000+$65,600)

5. Dr Work in Process Inventory $143,254

($68,780+$74,474)

Cr Manufacturing Overhead $143,254