Question

Bliny Corporation makes a product with the following standard costs for direct material and direct labor:

Direct material: 3.00 meters at $3.10 per meter	$	9.30
Direct labor: 0.40 hours at $12.50 per hour	$	5.00

During the most recent month, 5,300 units were produced. The costs associated with the month’s production of this product were as follows:

Material purchased: 12,300 meters at $2.80 per meter	$	34,440
Material used in production: 16,550 meters		–
Direct labor: 2,100 hours at $12.85 per hour	$	26,985

The standard cost variances for direct material and direct labor are:

Materials price variance: 12,300 meters at $0.30 per meter F	$	3,690	F
Materials quantity variance: 650 meters at $3.10 per meter U	$	2,015	U
Labor rate variance: 2,100 hours at $0.35 per hour U	$	735	U
Labor efficiency variance: 20 hours at $12.50 per hour F	$	250	F

Required:
1.	Prepare the journal entry to record the purchase of materials on account for the month. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

       

2.	Prepare the journal entry to record the use of materials for the month. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

      

3.	Prepare the journal entry to record the incurrence of direct labor cost for the month. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

      

Answer 1

Journal entries :

No	account and explanation	debit	credit
1	Raw material	38130
	Material price variance		3690
	Account payable		34440
	(To record material purchase)
2	Work in process (5300*3*3.1)	49290
	Material quantity variance	2015
	Raw material (16550*3.1)		51305
	(To record use of material)
3	Work in process	26500
	Labor rate variance	735
	Labor efficiency variance		250
	Wages payable		26985
	(To record labor)