DM & DL variances; journal entries Madzinga's Draperies manufactures curtains. Curtain #4571 requires the following: Direct...

Transcribed Image Text:

DM & DL variances; journal entries Madzinga's Draperies manufactures curtains. Curtain #4571 requires the following: Direct material standard 10 square yards at $5 per yard Direct labor standard 5 hours at $10 per hour During the second quarter, the company purchased 20,400 square yards at a cost of $99,960 and used 19,800 square yards to produce 1,800 Curtain #4571s. Direct labor totaled 9,120 hours for $95,760. a. Compute the material price and quantity variances. Note: Do not use a negative sign with your answers. Material price variance $ 34,440 x Favorable 4,140 x Unfavorable Material quantity variance $ b. Prepare the journal entries for the purchase and use of direct material. Note: Round amounts to the nearest whole dollar. Note: Record any multiple debits or any multiple credits in alphabetical order by account name. Account Raw Material Inventory Accounts Payable Material Price Variance To record material price variance Raw Material Inventory To record material quantity variance Debit 199,960 x Credit 0 0 199,960 x x 138,000 x 0 x 0 138,000 x c. Compute labor rate and labor efficiency variances. Note: Do not use a negative sign with your answers. Note: Round your final answer to the nearest whole dollar. Labor rate variance $ 224,224 x Unfavorable Labor efficiency variance $ 1,260 x Unfavorable Total labor variance $ 225,484 x Unfavorable = d. Prepare the journal entry to accrue direct labor cost and record the labor variances for the quarter. Account Work in Process Inventory Labor Rate Variance Labor Efficiency Variance Wages Payable To record labor variances Dendous Debit Credit 225,484 x 111,536 x 0 0 x 1,260 x 0 335,760 x DM & DL variances; journal entries Madzinga's Draperies manufactures curtains. Curtain #4571 requires the following: Direct material standard 10 square yards at $5 per yard Direct labor standard 5 hours at $10 per hour During the second quarter, the company purchased 20,400 square yards at a cost of $99,960 and used 19,800 square yards to produce 1,800 Curtain #4571s. Direct labor totaled 9,120 hours for $95,760. a. Compute the material price and quantity variances. Note: Do not use a negative sign with your answers. Material price variance $ 34,440 x Favorable 4,140 x Unfavorable Material quantity variance $ b. Prepare the journal entries for the purchase and use of direct material. Note: Round amounts to the nearest whole dollar. Note: Record any multiple debits or any multiple credits in alphabetical order by account name. Account Raw Material Inventory Accounts Payable Material Price Variance To record material price variance Raw Material Inventory To record material quantity variance Debit 199,960 x Credit 0 0 199,960 x x 138,000 x 0 x 0 138,000 x c. Compute labor rate and labor efficiency variances. Note: Do not use a negative sign with your answers. Note: Round your final answer to the nearest whole dollar. Labor rate variance $ 224,224 x Unfavorable Labor efficiency variance $ 1,260 x Unfavorable Total labor variance $ 225,484 x Unfavorable = d. Prepare the journal entry to accrue direct labor cost and record the labor variances for the quarter. Account Work in Process Inventory Labor Rate Variance Labor Efficiency Variance Wages Payable To record labor variances Dendous Debit Credit 225,484 x 111,536 x 0 0 x 1,260 x 0 335,760 x