Fischer Fabrication reported the following information concerning its direct materials: Direct materials purchased (actual) $ 365,000 Standard cost of materials purchased $ 352,000 Standard price times actual amount of materials used $ 324,000 Actual production 55,000 units Standard direct materials costs per unit produced $ 6 Assume that Fischer Fabrication had no beginning finished goods inventory and only produced one product. A count of inventory showed that 4,400 units remained in the warehouse. Required: a. Assume Fischer writes off all variances to Cost of Goods Sold. Prepare the entries Fischer would make to record and close out the variances. b. Assume Fischer prorates all variances to the appropriate accounts. Prepare the entries Fischer would make to record and close out the variances.
Fischer Fabrication reported the following information concerning its direct materials: Direct materials purchased (actual) $ 365,000 Standard cost of materials purchased $ 352,000 Standard price times actual amount of materials used $ 324,000 Actual production 55,000 units Standard direct materials costs per unit produced $ 6 Assume that Fischer Fabrication had no beginning finished goods inventory and only produced one product. A count of inventory showed that 4,400 units remained in the warehouse. Required: a. Assume Fischer writes off all variances to Cost of Goods Sold. Prepare the entries Fischer would make to record and close out the variances. b. Assume Fischer prorates all variances to the appropriate accounts. Prepare the entries Fischer would make to record and close out the variances.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter2: Accounting For Materials
Section: Chapter Questions
Problem 14P: An examination of Buckhorn Fabricators records reveals the following transactions: a. On December...
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Fischer Fabrication reported the following information concerning its direct materials:
| Direct materials purchased (actual) | $ 365,000 | |
|---|---|---|
| $ 352,000 | ||
| Standard price times actual amount of materials used | $ 324,000 | |
| Actual production | 55,000 | units |
| Standard direct materials costs per unit produced | $ 6 |
Assume that Fischer Fabrication had no beginning finished goods inventory and only produced one product. A count of inventory showed that 4,400 units remained in the warehouse.
Required:
a. Assume Fischer writes off all variances to Cost of Goods Sold. Prepare the entries Fischer would make to record and close out the variances.
b. Assume Fischer prorates all variances to the appropriate accounts. Prepare the entries Fischer would make to record and close out the variances.
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