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Item 1

Exercise 17-22 (Static) Prorating Direct Material Cost Variances (LO 17-1)

In reviewing activity for July, the controller of Mathis, Inc., collected the following data concerning direct materials.

Actual production		103,000	units
Direct materials purchased (actual)	$	1,642,800
Standard cost of materials purchased		1,554,000
Standard direct materials costs per unit produced		14
Standard price times actual amount of materials used		1,405,950

Assume that Mathis Company had no beginning finished goods inventory and only produced one product. Mathis sold 90,640 units during the period.

Required: a. Assume Mathis writes off all variances to Cost of Goods Sold. Prepare the entries Mathis would make to record and close out the variances. b. Assume Mathis prorates all variances to the appropriate accounts. Prepare the entries Mathis would make to record and close out the variances.

0.9points

eBook

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References

Check my workCheck My Work button is now enabled2

Item 1

Exercise 17-22 (Static) Prorating Direct Material Cost Variances (LO 17-1)

In reviewing activity for July, the controller of Mathis, Inc., collected the following data concerning direct materials.

Actual production		103,000	units
Direct materials purchased (actual)	$	1,642,800
Standard cost of materials purchased		1,554,000
Standard direct materials costs per unit produced		14
Standard price times actual amount of materials used		1,405,950

Assume that Mathis Company had no beginning finished goods inventory and only produced one product. Mathis sold 90,640 units during the period.

Required: a. Assume Mathis writes off all variances to Cost of Goods Sold. Prepare the entries Mathis would make to record and close out the variances. b. Assume Mathis prorates all variances to the appropriate accounts. Prepare the entries Mathis would make to record and close out the variances.