Question: Make the journal entries to record the purchase and use

Make the journal entries to record the purchase and use of direct materials and direct labour made by Dock Guard in E10-27A.
In exercise Dock Guard, which uses a standard cost accounting system, manufactured 200,000 boat fenders during the year, using 1,450,000 m of extruded vinyl purchased at $1.05 per metre. Production required 4,500 direct labour hours that cost $14 per hour. The materials standard was 7 m of vinyl per fender at a standard cost of $1.10 per metre. The labour standard was 0.025 direct labour hour per fender at a standard cost of $13 per hour. Compute the price and efficiency variances for direct materials and direct labour. Does the pattern of variances suggest that Dock Guard’s managers have been making trade-offs? Explain.

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  • CreatedApril 30, 2015
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