Question

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

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.)  


   

Business   Accounting   
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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)
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