Direct Labor and Direct Materials Variances, Journal Entries Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels: Paper pulp (3 lbs. @ $0.40) $ 1.20 Labor (2 hrs. @ $12) 24.00 Total prime cost $25.20 During the first quarter of the year, Jameson produced 55,000 cases of paper towels. The company purchased and used 165,700 pounds of paper pulp at $0.37 per pound. Actual direct labor used was 111,000 hours at $12.10 per hour. Required: Instructions for parts 1 and 2: If a variance is zero, enter "0" and select "Not applicable"
Direct Labor and Direct Materials Variances, Journal Entries Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels: Paper pulp (3 lbs. @ $0.40) $ 1.20 Labor (2 hrs. @ $12) 24.00 Total prime cost $25.20 During the first quarter of the year, Jameson produced 55,000 cases of paper towels. The company purchased and used 165,700 pounds of paper pulp at $0.37 per pound. Actual direct labor used was 111,000 hours at $12.10 per hour. Required: Instructions for parts 1 and 2: If a variance is zero, enter "0" and select "Not applicable"
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 20E: Jameson Company produces paper towels. The company has established the following direct materials...
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Direct Labor and Direct Materials Variances,
Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels:
| Paper pulp (3 lbs. @ $0.40) | $ 1.20 | |
| Labor (2 hrs. @ $12) | 24.00 | |
| Total prime cost | $25.20 |
During the first quarter of the year, Jameson produced 55,000 cases of paper towels. The company purchased and used 165,700 pounds of paper pulp at $0.37 per pound. Actual direct labor used was 111,000 hours at $12.10 per hour.
Required:
Instructions for parts 1 and 2: If a variance is zero, enter "0" and select "Not applicable"
See screenshots
Transcribed Image Text:1. Calculate the direct materials price and usage variances.
Materials Price Variance
Materials Usage Variance
2. Calculate the direct labor rate and efficiency variances.
Labor Rate Variance
Labor Efficiency Variance
3. Prepare the journal entries for (1) the direct materials price variance, (2) the direct materials usage variance, and (3) the direct labor variances. If an amount box does not require an entry, leave it blank or enter "0".
1.
2.
3.
Transcribed Image Text:Direct Labor and Direct Materials Variances, Journal Entries
Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels:
Paper pulp (3 Ibs. @ $0.40)
$ 1.20
Labor (2 hrs. @ $12)
24.00
Total prime cost
$25.20
During the first quarter of the year, Jameson produced 55,000 cases of paper towels. The company purchased and used 165,700 pounds of paper pulp at $0.37 per pound. Actual direct labor used was 111,000 hours at $12.10
per hour.
Required:
Instructions for parts 1 and 2: If a variance is zero, enter "0" and select "Not applicable" from the drop down box.
1. Calculate the direct materials price and usage variances.
Materials Price Variance
Materials Usage Variance
2. Calculate the direct labor rate and efficiency variances.
Labor Rate Variance
Labor Efficiency Variance
3. Prepare the journal entries for (1) the direct materials price variance, (2) the direct materials usage variance, and (3) the direct labor variances. If an amount box does not require an entry, leave it blank or enter "0".
1.
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