Please help with journal entries, I have done the calculations just don\'t under
ID: 2476753 • Letter: P
Question
Please help with journal entries, I have done the calculations just don't understand how to do the journal. Apollo Sports manufacturers fabric tents. The poles are purchased from a vendor, so the only part manufactured is the actual fabric tent. The company uses a standard cost system based on manufacturing 5,000 tents per month. Overhead is applied on a per-unit basis. In May, 4,840 tents were produced. Management has a policy that all variances greater than 3% from standard should be investigated. Standard and actual costs are listed below: Standard Direct material 18 yards at $3.20 per yard Direct labor 6.5 hours at $16.00 per hour Overhead applied $12.00 per tent Actual Direct material 86,550 yards at $3.25 per yard Direct labor 32,100 hours at $15.80 per hour Actual overhead $56,750Explanation / Answer
Material Price Variance = Actual Quantity (Standard Price - Actual Price)
= 86550 (3.20 - 3.25)
= 4,327.5 (U)
Material Quantity Variance = Standard Rate (Standard Quantity - Actual Quantity)
= 3.20 (87120 - 86550)
= 1824 (F)
Direct Labour Rate Variance = Actual direct labour hour (Standard Rate - Actual Rate)
= 32,100 (16 - 15.80)
= 6420 (F)
Direct Labour Efficiency Variance = Standard Rate (Standard Hour - Actual Hour)
= 16 (31,460 - 32,100)
= 10,240 (U)
Overhead Spending Variance = Actual Quantity (Standard Rate - Actual Rate)
= 4840 (12) - 56,750
= 1330 (F)
Journal Entry
1. Recording Material Variance
2. Recording Labour Variance
3. Recording Overhead Variance
Direct Material 276,960 Direct Material Price Variance 4,327.50 Accounts Payable 281,287.50