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Hart Company made 4,900 bookshelves using 22,000 board feet of wood costing $261,800. The company's direct materials standards for one bookshelf are 5 board feet of wood at $11.80 per board foot.

Hart Company records standard costs in its accounts and its materials variances in separate accounts when it assigns materials costs to the Work in Process Inventory account.

(1) Prepare the journal entry that both charges the direct materials costs to the Work in Process Inventory account and records the materials variances in their proper accounts.
(2) Assume that Hart's materials variances are the only variances accumulated in the accounting period and that they are immaterial. Prepare the adjusting journal entry to close the variance accounts at period-end.

Answer 1

		Debit	Credit
1	Goods in Process inventory	289100		=4900*5*11.8
	Direct materials price variance	2200		=261800-(22000*11.8)
	Direct materials quantity variance		29500	=11.8*(4900*5-22000)
	Raw materials inventory		261800
2	Direct materials quantity variance	29500
	Direct materials price variance		2200
	Cost of goods sold		27300