Question

3. Use T-accounts to show the flow of costs through the system. In showing the flow, you do not need to show detailed overhead variances. Show only the over- and underapplied variances for fixed and variable overhead. Record the following transactions in the T-accounts: If an amount is zero, enter "O".

Answer 1

Accounts Payable Materials Accounts Payable $ $ 2,64,368 Materials 2,64,368 Work in Process Direct Material Price Variance Direct Material Usage Variance $ $ $ 2,48,000 10,168 6,200 Wages Payable Work in Process $ 6,28,184 $ 2,04,352 Materials Wages Payable Variable OH control (12772*8) Fixed OH control (12772*6) Total $ $ $ $ $ Work in Process 2,48,000 Finished Goods 2,04,352 99,200 76,632 6,28,184 Total Direct Labor Rate Variance O Cost of Goods sold Wages expense $ 6,28,184 Direct Labor Efficiency Variance 5,952 Cost of Goods sold Wages expense $ 5,952 Finished Goods 6,28,184 Cost of goods sold Work in Process $ $ 6,28,184 Cash $ Variable OH control 1,07,310 Work in Process (12772*8) Cost of Goods sold (Under applied) $ $ 1,02,176 5,134 $ 2,728 $ $ $ Finished Goods Direct Material Price Variance Direct Material Usage Variance Labor efficency Variance Labor rate Variance Variable OH Control Cost of Goods Sold 6,28,184 Fixed OH Control 10,168 6,200 5,952 $ $ Fixed OH control 73,904 Work in Process (12772*6) 2,728 Cash Cost of Goods sold (Over-Applied) 76,632 $ $ 5,134 Direct Materials Usage Variance 6,200 Cost of Goods sold Material Direct Materials Price Variance $ 10,168 Cost of Goods sold 6,200 Materials $ 10,168 | $ 2,64,368 -10,168 2,54,200 Note 3 Standard Labor cost per unit Standard Labor hrs p.u Standard labor cost per hr (8/0.50) 0.50 16 $ Note 1 Actual Hours Standard hours (12772/1.03) Actual Output Standard hr per unit of output (12400/24800) Standard Variable OH per DLH (4/0.50) Standard Fixed OH per DLH (3/0.50) Note 2 12,772 Material purchase price $ 12,400 (-) Unfavorable price Variance $ 24,800 Net $ 0.50 Standard Material cost (24800*10) $ 8.00 Material Usage Variance $ (254200-248000) 6.00 $ 1,98,400 2,48,000 6,200 U S $ 2,04,352 $ Standard labor cost (SH*SR)=(12400*16) Actual labor cost at standard rate (AH*SR)=(12772*16) Labor efficiency Variance (198400-204352) Actual labor cost Labor rate Variance $ 5,952 U $ 2,04,352 Activate Win Go to Settings to