Bliny Corporation makes a product with the following standard costs for direct material and direct labour: Direct
Question:
Bliny Corporation makes a product with the following standard costs for direct material and direct labour:
Direct material: 2.00 metres at $3.25 per metre.................................$6.50
Direct labour: 0.40 hours at $12.50 per hour......................................$5.00
During the most recent month, 5,000 units were produced. The costs associated with the month’s production of this product were as follows:
Material purchased: 12,000 metres at $3.45 per metre.............................$41,400
Material used in production: 10,500 metres.........................................................—
Direct labour: 1,980 hours at $12.20 per hour............................................$24,156
The standard cost variances for direct material and direct labour have been computed as follows:
Materials price variance: 12,000 metres at $0.20 per metre U.............................$2,400 U
Materials quantity variance: 500 metres at $3.25 per metre U.............................$1,625 U
Labour rate variance: 1,980 hours at $0.30 per hour F.............................................$ 594 F
Labour efficiency variance: 20 hours at $12.50 per hour F......................................$ 250 F
Required:
1. Prepare the general ledger entry to record the purchase of materials on account for the month.
2. Prepare the general ledger entry to record the use of materials for the month.
3. Prepare the general ledger entry to record the incurrence of direct labour cost for the month.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Introduction to Managerial Accounting
ISBN: 978-1259105708
5th Canadian edition
Authors: Peter C. Brewer, Ray H. Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan