FUNDAMENTALS OF COST ACCOUNTING
6th Edition
ISBN: 9781266742040
Author: LANEN
Publisher: MCG
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Question
Chapter 16, Problem 70P
To determine
Prepare journal entries to record the activity for the last month using
Expert Solution & Answer
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Explanation of Solution
Prepare journal entries to record the activity for the last month using standard costing:
For direct material:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) |
Work-in-Process Inventory | 400,000 | |||
Materials Price Variance | 11,400 | |||
Materials Efficiency Variance | 56,000 | |||
Accounts Payable | 467,400 | |||
(To record the cost related to direct material) |
Table (1)
For direct labor:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) |
Work-in-Process Inventory | 500,000 | |||
Direct Labor Price Variance | 10,080 | |||
Direct Labor Efficiency Variance | 4,000 | |||
Wages Payable | 514,080 | |||
(To record the cost related to direct labor) |
Table (2)
For overhead:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) |
Work-in-Process Inventory (Variable overhead) | 300,000 | |||
Work-in-Process Inventory (Fixed overhead) | 100,000 | |||
Variable Overhead Applied | 300,000 | |||
Fixed Overhead Applied | 100,000 | |||
(To record the fixed and variable overhead applied) | ||||
Overhead (Actual) | 444,000 | |||
Miscellaneous Payables and Inventory Accounts | 444,000 | |||
(To record the actual overhead) | ||||
Variable Overhead (Applied) | 300,000 | |||
Fixed Overhead (Applied) | 100,000 | |||
Overhead Price Variance | 26,400 | |||
Variable Overhead Efficiency Variance | 2,400 | |||
Fixed Overhead Production Volume Variance | 15,200 | |||
Overhead (Actual) | 444,000 | |||
(To record the fixed and variable applied overhead and variances) | ||||
Table (3)
For finished goods:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) |
Finished Goods Inventory | 1,300,000 | |||
Work-in-Process Inventory | 1,300,000 | |||
(To record the finished goods inventory) |
Table (4)
For the sales made:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) |
2,375,000 | ||||
Sales Revenue | 2,375,000 | |||
(To record the sales made) | ||||
Cost of Goods Sold | 1,300,000 | |||
Finished Goods Inventory | 1,300,000 | |||
(To record the cost of goods sold) |
Table (5)
Record the disposition of variances:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) |
Cost of Goods Sold | 125,480 | |||
Materials Price Variance | 11,400 | |||
Materials Efficiency Variance | 56,000 | |||
Direct Labor Price Variance | 10,080 | |||
Direct Labor Efficiency Variance | 4,000 | |||
Variable Overhead Efficiency Variance | 2,400 | |||
Fixed Overhead Production Volume Variance | 15,200 | |||
Overhead Price Variances | 26,400 | |||
(To close the variance accounts to Cost of Goods Sold) | ||||
Table (6)
The
Direct Material Variances | Amount |
Price Variance | $ 11,400 |
Efficiency Variance | $ 56,000 |
Total Variance | $ 67,400U |
Direct Labor Variances | |
Price Variance | $ 10,080 |
Efficiency Variance | $ 4,000 |
Total Variance | $ 14,080U |
Variable Overhead Variance: | |
Efficiency Variance | $ 2,400U |
Total Variance | $ 2,400U |
Fixed Overhead Variance | |
Production Volume Variance | $ 15,200 |
Total Variance | $ 15,200U |
Table (7)
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Chapter 16 Solutions
FUNDAMENTALS OF COST ACCOUNTING
Ch. 16 - What are the advantages of the contribution margin...Ch. 16 - How can a budget be used for performance...Ch. 16 - The flexible budget for coats it computed by...Ch. 16 - A flexible budget is: a. Appropriate for control...Ch. 16 - What is the standard cost sheet?Ch. 16 - What is the basic difference between a mailer...Ch. 16 - Standards and budgets are the same thing. True or...Ch. 16 - Actual direct materials costs differ from the...Ch. 16 - Fixed cost variances are computed differently from...Ch. 16 - What is the advantage of preparing the flexible...
Ch. 16 - What is the link between flexible budgeting and...Ch. 16 - Actual revenues are greater than budgeted for...Ch. 16 - Pick an organization you know, such as a school,...Ch. 16 - Give two reasons why dividing production cost...Ch. 16 - Prob. 15CADQCh. 16 - My firm has a wage contract with the union....Ch. 16 - Prob. 17CADQCh. 16 - The production volume variance should be charged...Ch. 16 - Prob. 19CADQCh. 16 - Prob. 20CADQCh. 16 - Flexible Budgeting The master budget at Western...Ch. 16 - Sales Activity Variance Refer to the data in...Ch. 16 - Profit Variance Analysis Refer to the data in...Ch. 16 - Flexible Budget Given the data shown in the...Ch. 16 - Fill in Amounts on Flexible Budget Graph Fill in...Ch. 16 - Flexible Budget Label (a) and (b) in the graph and...Ch. 16 - Prepare Flexible Budget Osage, Inc., manufactures...Ch. 16 - Sales Activity Variance Refer to the data in...Ch. 16 - Profit Variance Analysis Use the information from...Ch. 16 - Sales Activity Variance The following data are...Ch. 16 - Sales Activity Variance Selected data for October...Ch. 16 - Prob. 32ECh. 16 - Prob. 33ECh. 16 - Prob. 34ECh. 16 - Prob. 35ECh. 16 - Prob. 36ECh. 16 - Prob. 37ECh. 16 - Variable Cost Variances The following data reflect...Ch. 16 - Variable Cost Variances The records of Norton,...Ch. 16 - (Appendix used in requirement [b]) Variable Cost...Ch. 16 - (Appendix used in requirement [b]) Variable Cost...Ch. 16 - Fixed Cost Variances Information on Carney...Ch. 16 - Prob. 43ECh. 16 - Prob. 44ECh. 16 - Fixed Cost Variances Mint Company applies fixed...Ch. 16 - Prob. 46ECh. 16 - Prob. 47ECh. 16 - (Appendix used in requirement [c]) Comprehensive...Ch. 16 - Comprehensive Cost Variance Analysis NSF Lube is a...Ch. 16 - Overhead Variances Brice Corporation shows the...Ch. 16 - Solve for Master Budget Given Actual Results A new...Ch. 16 - Find Missing Data for Profit Variance Analysis...Ch. 16 - Find Data for Profit Variance Analysis Required...Ch. 16 - Prob. 54PCh. 16 - Prepare Flexible Budget Odessa, Inc., reports the...Ch. 16 - Prob. 56PCh. 16 - Prob. 57PCh. 16 - Prob. 58PCh. 16 - Prob. 59PCh. 16 - Prob. 60PCh. 16 - Direct Materials Information about direct...Ch. 16 - Prob. 62PCh. 16 - Prob. 63PCh. 16 - Prob. 64PCh. 16 - Overhead Cost and Variance Relationships...Ch. 16 - Prob. 66PCh. 16 - Prob. 67PCh. 16 - Ethics and Standard Costs Farmer Franks produces...Ch. 16 - Comprehensive Variance Problem The standard cost...Ch. 16 - Prob. 70PCh. 16 - Find Actual and Budget Amounts from Variances JW...Ch. 16 - Variance Computations with Missing Data The...Ch. 16 - Comprehensive Variance Problem Sweetwater Company...Ch. 16 - Prob. 74PCh. 16 - Prob. 75PCh. 16 - Keewee Company manufactures a single product for...
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