Bliny Corporation makes a product with the following standard costs for direct m

Question

Bliny Corporation makes a product with the following standard costs for direct material and direct labor:

During the most recent month, 7,700 units were produced. The costs associated with the month’s production of this product were as follows:

The standard cost variances for direct material and direct labor are:

Prepare the journal entry to record the purchase of materials on account for the month. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Prepare the journal entry to record the use of materials for the month. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Prepare the journal entry to record the incurrence of direct labor cost for the month. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)  

**Could you please show me your work?

  Direct material: 1.50 meters at $5.70 per meter $ 8.55   Direct labor: .20 hours at $13.00 per hour $ 2.60

Explanation / Answer

1) Material price variance = ( Std rate - actual rate) Actual purchased

                                           = ($5.70 - $5.5) 14,700

                                         = 2940(F)

jouranl entry

(2) Material quantity variance = ( Std qty for actual production - actual used) std rate

                                                   = (1.5 *7700 - 11650) 5.7

                                                  = 570(U)

journal entry

3)Direct labor rate variance = (13 - 13.20 ) 1490

                                               = 298(U)

Efficiency variance

= ( std hrs for actual production - actual hrs ) std rate

= (.20 *7700 - 1490)13

=650(F)

Raw materials 14700 *5.7 $83,790 to Materials price variance $2940 To Accounts payable 14700*5.5 $80,850

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