Bliny Corporation makes a product with the following standard costs for direct m
ID: 2491751 • Letter: B
Question
Bliny Corporation makes a product with the following standard costs for direct material and direct labor: Direct material: 1.40 meters at $5.60 per meter $ 7.84 Direct labor: .50 hours at $13.00 per hour $ 6.50 During the most recent month, 7,900 units were produced. The costs associated with the month’s production of this product were as follows: Material purchased: 14,600 meters at $5.40 per meter $ 78,840 Material used in production: 11,160 meters – Direct labor: 3,900 hours at $13.20 per hour $ 51,480 The standard cost variances for direct material and direct labor are: Materials price variance: 14,600 meters at $0.20 per meter F $ 2,920 F Materials quantity variance: 100 meters at $5.60 per meter U $ 560 U Labor rate variance: 3,900 hours at $0.20 per hour U $ 780 U Labor efficiency variance: 50 hours at $13 per hour F $ 650 F Required: 1. 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.) 2. 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.) 3. 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.)
Explanation / Answer
Requirement
Account titles
Explanation
Debit
Credit
1
Raw Materials
(14,600 meters at $5.60 per meter)
$81,760
Materials Price Variance
(14,600 meters at $0.20 per meter F)
$2,920
Accounts Payable
(14,600 meters at $5.40 per meter)
$78,840
2
Work in Process
(11,060 meters at $5.6 per meter)
$61,936
Materials Quantity Variance
(100 meters at $5.60 per meter U)
$560
Raw Materials
(11,160 meters at $5.6 per meter)
$62,496
3
Work in Process
(3,950 hours at $13.00 per hour)
$51,350
Labor Rate Variance
(3,900 hours at $0.20 per hour U)
$780
Labor Efficiency Variance
(50 hours at $13.00 per hour F)
$650
Wages Payable
(3,900 hours at $13.20 per hour)
$51,480
Requirement
Account titles
Explanation
Debit
Credit
1
Raw Materials
(14,600 meters at $5.60 per meter)
$81,760
Materials Price Variance
(14,600 meters at $0.20 per meter F)
$2,920
Accounts Payable
(14,600 meters at $5.40 per meter)
$78,840
2
Work in Process
(11,060 meters at $5.6 per meter)
$61,936
Materials Quantity Variance
(100 meters at $5.60 per meter U)
$560
Raw Materials
(11,160 meters at $5.6 per meter)
$62,496
3
Work in Process
(3,950 hours at $13.00 per hour)
$51,350
Labor Rate Variance
(3,900 hours at $0.20 per hour U)
$780
Labor Efficiency Variance
(50 hours at $13.00 per hour F)
$650
Wages Payable
(3,900 hours at $13.20 per hour)
$51,480