Check my work Hartwell Company manufactures one product, it does not maintain an
ID: 2569140 • Letter: C
Question
Check my work Hartwell Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. Its predetermined overhead rate includes $2,185,500 of fixed manufacturing overhead in the numerator and 70,500 direct labor-hours in the denominator. The actual fixed manufacturing overhead for the period was $3,181,800. 14.32 points The company purchased (with cash) and used 69,000 yards of raw materials at a cost of $11.90 per yard. Its direct laborers worked 40,450 hours and were paid a total of $626,975. The company started and completed 46,000 units of finished goods during the period. Bowen's standard cost card for its only product is as follows: Print References Standard Cost Standard Price or Rate 1 yards 12.00 per yard12.00 Standard Quantity or Hours Direct materials Direct labor Pixed manufacturing overhead Total standard cost per unit 15.50 1.0 hours 15.50 per hour 1.0 hour 1.00 per hour $58.50 Required 1. When recording the raw material purchases (on account): a. The Raw Materials inventory will increase (decrease) by how much? b. The Cash will increase (decrease) by how much? C. The materials price variance will be favorable or unfavorable and by how much? 2. When recording the raw materials used in production: a. The Raw Materials inventory will increase (decrease) by how much? b. The Work in Process inventory will increase (decrease) by how much? C. The materials quantity variance will be favorable or unfavorable and by how much? 3. When recording the direct labor costs added to production: a. The Work in Process inventory will increase (decrease) by how much? b. The Cash will increase (decrease) by how much? C. The labor rate and efficiency variances will be favorable or unfavorable and by how much? Graw Hill Prev 6 of 7 Next >Explanation / Answer
JOURNAL ENTRIES Debit Credit 1 Raw Materials 69000*12 828000 F MPV 6900 A/cs payable 821100 2 WIP -materials46000*1*12 552000 UF MQV 276000 Raw Materials 69000*12 828000 3 WIP-Labor 46000*1*15.50 713000 LRV---40450*(15.50-15.50) 0 F LEV--- (46000-40450)*15.50 86025 Wages Payable (40450*15.5) 626975 4 FOH Budget Actualy incurred 3181800 UF FOH Budget Variance(3181800-2185500) 996300 WIP -FOH applied 46000*1*31 1426000 UF FOH Volume variance(2185500-1426000) 759500 5 Finished goods inventory 2691000 WIP -materials46000*1*12 552000 WIP-Labor 46000*1*15.50 713000 WIP -FOH applied 46000*1*31 1426000 1a. Raw materials Inventory will Increase by 69000*12.00= 828000 1b. Cash will Decrease by 69000*11.90= 821100 1c. MPV will be Favourable by (12-11.90)*69000= 6900 2a. Raw materials Inventory will Decrease by 69000*12 828000 2b. WIP Inventory will Increase by 46000*1*12 552000 2c. MQV will be Unfavourable by (46000-69000)*12= 276000 3a. WIP Inventory will Increase by 46000*1*15.50= 713000 3b. Cash will Decrease by 40450*15.5= 626975 3c. LRV NoVariance by 40450*(15.5-15.5)= 0 LEV Favourable (46000-40450)*15.50 86025 4a. WIP Inventory will Increase by 46000*1*31= 1426000 4b. FOHBV Unfavourable by (2185500-3181800)= 996300 FOHVV Unfavourable by 2185500-1426000= 759500 5 Finished goods inventory will Increase by 2691000 WIP -materials46000*1*12 552000 WIP-Labor 46000*1*15.50 713000 WIP -FOH applied 46000*1*31 1426000 Total 2691000