Cheever Company uses a standard cost system for its single product. The following data are available: Actual
Question:
Actual results for the current period:
Purchase of direct materials (20,000 pounds)........... $19,500
Direct materials used................................................. 12,000 pounds
Direct Labor (10,200 hours)................................... $102,000
Units Produced ......................................................... 12,600
Standard cost, material quantity, and direct labor hours and rate per unit of output:
Direct Materials: 1 pound at $1 per pound
Direct Labor: 1 hour at $9.50 per hour
Required:
1. Compute the direct materials price and efficiency variances.
2. Compute the direct labor price and efficiency variances.
3. Prepare one journal entry to record the actual direct labor cost and the amount applied to production, including the direct labor price (rate) and efficiency (quantity) variances (standard costing system).
Cost Accounting Foundations and Evolutions
ISBN: 978-1111626822
8th Edition
Authors: Michael R. Kinney, Cecily A. Raiborn