Howard Company has established the following standards: Direct materials: 3.0 pounds at $4.00 Direct labor: 1.3...

Question

Question

Howard Company has established the following standards: Direct materials: 3.0 pounds at $4.00 Direct labor: 1.3 hours at $10

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Direct Materials Purchase Price Variance = (Actual Price per Pound - Standard Price per Pound) * Actual Pounds Purchased

= ($3.60 per pound - $4 per pound) * 67,000 pounds

= $0.40 per pound * 67,000 pounds

= $26,800 Favorable

Therefore, direct materials purchase price variance is $26,800 favorable.

Journal Entries:

Transaction	General Journal	Debit	Credit
b.	Work-in Process Inventory	$234,000
	Direct Materials (65,000 pounds * $3.60 per pound)		$234,000
	(To record the usage of direct materials)
c.	Direct Labor (25,000 hours * $9.80)	$245,000
	Cash		$245,000
	(To record the incurrence of direct labor costs)

Add a comment

Answer 2

Similar Homework Help Questions

Howard Company has established the following standards: Direct materials: 3.0 pounds at $4.00 Direct labor: 1.3...

Howard Company has established the following standards: Direct materials: 3.0 pounds at $4.00 Direct labor: 1.3 hours at $10 per hour Additional information was extracted from the accounting records: Actual production: 20,000 completed units Direct materials purchased: 67,000 pounds at $3.60, or $241,200 Direct materials consumed: 65,000 pounds Actual labor incurred: 25,000 hours at $9.8, or $245,000 Direct-labor rate variance: $42,000 favorable Direct-labor efficiency variance: $27,000 unfavorable Assume that the company computes variances at the earliest point in time. Required:...
B. Howard Company has established the following standards: Direct materials: 2.0 pounds at $4.10 Direct labor: 1.5 hour...

B. Howard Company has established the following standards: Direct materials: 2.0 pounds at $4.10 Direct labor: 1.5 hours at $7 per hour Additional information was extracted from the accounting records: Actual production: 32,000 completed units Direct materials purchased: 70,000 pounds at $3.82, or $267.400 Direct materials consumed: 65,000 pounds Actual labor incurred: 51,000 hours at $6.30, or $321,300 Direct-labor rate variance: $35,700 favorable Direct-labor efficiency variance: $21,000 unfavorable Assume that the company computes variances at the earliest point in time....
Jameson Company produces paper towels. The company has established the following direct materials and direct labor...

Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels: Paper pulp (3 lbs. @ $0.40) $ 1.20 Labor (2 hrs. @ $12) 24.00 Total prime cost $25.20 During the first quarter of the year, Jameson produced 45,000 cases of paper towels. The company purchased and used 135,700 pounds of paper pulp at $0.37 per pound. Actual direct labor used was 91,000 hours at $12.20 per hour....

The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ S4...

The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ S4 per pound = $12 per unit Direct labor: 2 hours per unit @ $8 per hour = $16 per unit Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. Units produced.. 600 units Direct material used. ..............
$ 7.50 37.50 Cost standards for one unit of product no. 077: Direct material 3 pounds...

$ 7.50 37.50 Cost standards for one unit of product no. 077: Direct material 3 pounds at $2.50 per pound Direct labor 5 hours at $7.50 per hour Actual results: Units produced 7,800 units Direct material purchased 26,000 pounds at $2.70 Direct material used 23,100 pounds at $2.70 Direct labor 40,100 hours at $7.30 $ 70,200 62,370 292,730 Assume that the company computes variances at the earliest point in time. The direct-labor rate variance is: Multiple Choice 0 $7,800F. 0...
36 $ 7.50 37.50 Cost standards for one unit of product no. 077: Direct material 3 pounds at $2.50 per pound Direct lab...

36 $ 7.50 37.50 Cost standards for one unit of product no. 077: Direct material 3 pounds at $2.50 per pound Direct labor 5 hours at $7.50 per hour Actual results: Units produced 8,100 units Direct material purchased 26,600 pounds at $2.70 Direct material used 24,000 pounds at $2.70 Direct labor 41,100 hours at $7.30 (8 04:26:11 $ 71,820 64,800 300,030 Print Assume that the company computes variances at the earliest point in time. The direct-material price variance is: Multiple...

The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ $4...

The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ $4 per pound $12 per unit Direct labor: 2 hours per unit @ $8 per hour = $16 per unit Variable manufacturing overhead: 2 hours per unit@ $5 per hour $10 per unit Actual production figures for the past year are given below The company records the materials price variance when materials are purchased Units produced.. 600 units 2,000 pounds si1,400 S9,240 S5,720 Direct material...
The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ $4...

The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ $4 per pound = $12 per unit Direct labor: 2 hours per unit @ $8 per hour = $16 per unit Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. Units produced 600 units Direct material used .......
The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ 84...

The Litton Company has established standards as follows: Direct material: 3 pounds per unit @ 84 per pound = $12 per unit Direct labor: 2 hours per unit @ $8 per hour = $16 per unit Variable manufacturing overhead: 2 hours per unit @ $5 per hour = $10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. 600 units 2,000 pounds $11,400 $9,240 $5,720 Units...

3) Chemical, Inc., has set the following standards for direct materials and direct labor for each...

3) Chemical, Inc., has set the following standards for direct materials and direct labor for each 20-pour bag of Weed-Be-Doom: Per Bag $2.00 Direct materials: 25 pounds XF-2000 a $0.08/1b. = Direct labor: 0.05 hour @ $32/hr. = 1.60 The company manufactured 100,000 bags of Weed-Be-Doom in December and used 2,700,000 pounds of XF-2000 and 5,200 direct labor-hours. During the month the company purchased 3.000.000 lbs. of XF-2000 at $0.075 per pound and incurred a total payroll of $182,000 for...

Howard Company has established the following standards: Direct materials: 3.0 pounds at $4.00 Direct labor: 1.3...

Homework Answers