Rip Tide Company manufactures surfboards. Its standard cost
information follows:
| Standard Quantity | Standard Price (Rate) | Standard Unit Cost | ||||||
| Direct materials (fiberglass) | 10.2 | sq. ft. | $ | 4.6 | per sq. ft. | $ | 46.92 | |
| Direct labor | 9.5 | hrs. | $ | 13 | per hr. | 123.50 | ||
| Variable manufacturing overhead (based on direct labor hours) | 9.5 | hrs. | $ | 5 | per hr. | 47.50 | ||
| Fixed manufacturing overhead ($37,000 ÷ 305 units) | 121.31 | |||||||
Rip Tide has the following actual results for the month of
June:
| Number of units produced and sold | 160 | |
| Number of square feet of fiberglass used | 5,900 | |
| Cost of fiberglass used | $ | 30,680 |
| Number of labor hours worked | 1,460 | |
| Direct labor cost | $ | 20,002 |
| Variable overhead cost | $ | 6,570 |
| Fixed overhead cost | $ | 21,500 |
Required:
1 & 2. Prepare the journal entries to record the
direct materials, direct labor costs and related variances for Rip
Tide. Assume the company purchases raw materials as needed and does
not maintain any ending inventories. (If no entry is
required for a transaction/event, select "No Journal Entry
Required" in the first account field. Do not round intermediate
calculations and round your final answers to nearest dollar
amount.)
Record the entry for direct materials costs and variances. Record the entry for direct labor costs and variance.
Record the entry for direct materials costs and variances. Record the entry for direct labor costs and variance.
| Date | accounts & explanation | debit | credit |
| Work in process (160*46.92) | 7507.20 | ||
| Material rate variance | 3540 | ||
| Material quantity variance | 19632.8 | ||
| Account payable | 30680 | ||
| (To record material cost and variance) | |||
| Work in process (160*123.50) | 19760 | ||
| Labour rate variance | 1022 | ||
| Labour efficiency variance | 780 | ||
| wages payable | 20002 | ||
| (To record labour cost and variance) |
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