Concept explainers
Preparing journal entries
Hayesvillc Company uses a
Standard
3 yards of cloth per unit at $1.05 per yard
2 direct labor hours per unit at $10.25 per hours
Actual:
2,700 yards of cloth were purchased at $1.10 per yard
Employees worked 1,300 hours and were paid $9.75 per hours
Actual variable overhead was $4,000
Actual fixed overhead was $2,500
Hayesville Company reported the following variances:
Direct Materials Cost Variance | $ 135 F |
Direct Materials Efficiency Variance | 315 F |
Direct Labor Cost Variance | 650 U |
Direct Labor Efficiency Variance | 7,715 F |
Variable Overhead Cost Variance | 1,400 U |
Variable Overhead Efficiency Variance | 1,400 F |
Fixed Overhead Cost Variance | 200 U |
Fixed Overhead Volume Variance | 1,700 F |
Hayesville produced 1,000 units of finished product in 2016. Record the journal entries to record direct material, direct labor, variable overhead, and fixed overhead, assuming all expenditure were on accounts and there were no beginning or ending balance in the inventory accounts (all material purchased were used in production, and all goods produced were sold.) Record the journal entries to record the transfer to Finished Goods Inventory and Cost of Goods Sold (omit the
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