Carlo Lee Corp. has established the following standard cost per unit:
Materials—5.5 lb @ $2.20 per lb . . . . . . . . . . . . . . . . . . . . . $12.10
Labor—1.8hr @ $10 per hr. . . . . . . . . . . . . . . . . . . . . . . . . . 18.00
Although 10,000 units were budgeted, only 8,800 units were produced.
The purchasing department bought 55,000 lb of materials at a cost of $123,750. Actual pounds of materials used were 54,305.
Direct labor cost was $186,550 for 18,200 hours worked.
Required:
1. Make journal entries to record the materials transactions, assuming that the materials price variance was recorded at the time of purchase.
2. Make journal entries to record the labor variances.