Question

Hart Company made 3,000 bookshelves using 22,000 board feet of wood costing $266,200. The company's direct materials standards for one bookshelf are 8 board feet of wood at $12 per board foot. Exercise 08-14A Recording and closing materials variances LO P6 Hart Company uses a standard costing system. (1) Prepare the journal entry to charge direct materials costs to Work in Process Inventory and record the materials variances (2) Assume that Hart's materials variances are the only variances accumulated in the accounting period and that they are immaterial. Prepare the adjusting journal entry to close the variance accounts at period-end. Complete this question by entering your answers in the tabs below. Required 2 Required 1 Prepare the journal entry to charge direct materials costs to Work in Process Inventory and record the materials variances. View transaction list Journal entry worksheet A Record price and quantity variances. Note: Enter debits before credits. Transaction General Journal Debit Credit 1

Answer 1

Transaction	General Journal	Debit	Credit
Required 1
1	Goods in Process Inventory (SQ x SP)	288,000
	Direct Materials Price Variance (Note)	2,200
	Direct Materials Quantity Variance (Note)		24,000
	Raw Materials Inventory (given)		266,200
Required 2
1	Direct Materials Quantity Variance	24,000
	Direct Materials Price Variance		2,200
	Cost of Goods Sold		21,800

WORKING NOTES

Actual Quantity (AQ)	22,000 board feet (given)
Actual Price (AP)	$266,200/22,000 board feet = $12.10 per board feet
Standard Quantity (SQ)	3,000 bookshelves x 8 board feet = 24,000 board feet
Standard Price (SP)	$ 12 per board feet (given)

Direct Materials Price Variance	AQ x ( SP – AP)	22,000 board feet x ( $12 - $12.10) = $2,200 Unfavorable
Direct Materials Quantity Variance	SP x ( SQ – AQ)	$12 x ( 24,000 – 22,000) board feet = $24,000 Favorable
Direct Material Cost Variance	AQ x AP – SQ x SP	(22,000 board feet x $12.10) – (24,000 board feet x $12) = $21,800 Favorable