Question

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

Direct material: 1.70 meters at $5.60 per meter	$	9.52
Direct labor: .40 hours at $13.00 per hour	$	5.20

During the most recent month, 8,400 units were produced. The costs associated with the month’s production of this product were as follows:

Material purchased: 15,000 meters at $5.40 per meter	$	81,000
Material used in production: 14,380 meters		–
Direct labor: 3,310 hours at $13.20 per hour	$	43,692

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

Materials price variance: 15,000 meters at $0.20 per meter F	$	3,000	F
Materials quantity variance: 100 meters at $5.60 per meter U	$	560	U
Labor rate variance: 3,310 hours at $0.20 per hour U	$	662	U
Labor efficiency variance: 50 hours at $13 per hour F	$	650	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 entry :

Date	accounts & explanation	debit	credit
	Direct material (15000*5.6)	84000
	Material price variance		3000
	Account payable		81000
	(To record raw material purchase)
	Work in process (14280*5.6)	79968
	Material quantity variance	560
	Direct material (14380*5.6)		80528
	(To record use of material)
	Work in process (8400*5.2)	43680
	labour rate variance	662
	Labour efficiency variance		650
	Wages payable		43692
	(To record direct labour)