Solve Sub parts: Direct labor efficiency (quantity) var.$________U F and all journals STANDARD COST SYSTEM: VARIANCES AND ENTRIES: Company B uses a standard cost system to control manufacturing costs. All expenditures were on account. Standards to produce one unit of finished product: Direct materials: 2 lbs. @ $8.00 per lb. Direct labor: 6 hours at $20.00 per hour Actual results: Actual production: 62,000 units Actual materials purchased: 130,000 lbs. @ $8.20 per lb. Actual materials used: 125,000 lbs Actual direct labor usage: 370,000 hours Actual direct labor costs: $ 7,585,000 REQUIRED: COMPUTE (must show calculations) and indicate whether favorable (F) or unfavorable (U) variance Direct materials price variance $____________ U F Direct materials quantity variance: $_________U F Direct labor rate (price) variance: $__________U F Direct labor efficiency (quantity) var.$________U F JOURNAL ENTRIES Including the related variances: Journalize the purchase of direct materials on account: Journalize the usage of direct materials: Journalize the usage of direct labor: Journalize the closing entry assuming that the variances taken together are immaterial: Solve Sub parts: Direct labor efficiency (quantity) var.$________U F and all journals
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Solve Sub parts:
Direct labor efficiency (quantity) var.$________U F
and all journals
Company B uses a standard cost system to control
Standards to produce one unit of finished product:
Direct materials: 2 lbs. @ $8.00 per lb.
Direct labor: 6 hours at $20.00 per hour
Actual results:
Actual production: 62,000 units
Actual materials purchased: 130,000 lbs. @ $8.20 per lb.
Actual materials used: 125,000 lbs
Actual direct labor usage: 370,000 hours
Actual direct labor costs: $ 7,585,000
REQUIRED: COMPUTE (must show calculations) and indicate whether favorable (F) or unfavorable (U) variance
Direct materials price variance $____________ U F
Direct materials quantity variance: $_________U F
Direct labor rate (price) variance: $__________U F
Direct labor efficiency (quantity) var.$________U F
Including the related variances:
- Journalize the purchase of direct materials on account:
- Journalize the usage of direct materials:
- Journalize the usage of direct labor:
- Journalize the closing entry assuming that the variances taken together are immaterial:
Solve Sub parts:
Direct labor efficiency (quantity) var.$________U F
and all journals
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