Question

* Requirements 3. Compute the January 2017 price and efficiency variances of direct materials and direct manufacturing labor. Prepare journal entries to record the variances in requirement 1. Comment on the January 2017 price and efficiency variances of Schuyler Corporation Why might Schuyler calculate direct materials price variances and direct materials efficiency variances with reference to different points in time? Standards XS the flex Direct materials: 10 lb. at $4.50 per lb. Direct manufacturing labor: 0.5 hour at $30 per hour $ 45.00 15.00 al outp Actual Data act materials a infavora ficiency riances Actual results in January 2017 were as follows: Direct materials: 98,055 lb. used Direct manufacturing labor: 4,900 hours $154,350 Print Done ut fields and

Answer 1

Answer » Price and materials efficiency and direct variances of labour as January 2017. Here a actual result 1 budgeted Price (actual aty purchased) Price variana (a-b] none dy budgeted Price [actual aty used ] e efficiency variance [e-d] Details - Actual res (Purchase Price Budgetede variance Usedi budgeted I Price flexible efficiency budget variance The no 9850 of units

Direct u65000 100000 lb & 1980556 9850 x materials 115000 19 X 4.50 Peribes 50 22002 450000 [a-b7 4.50 Perib 10 lbx 4.50 Pozy 41248 =uu 3210 (F) Direct labor $154350 4900 bisx & E 73500 4900 hrs x 9850x 0.5 & zo per by hr x 230 - 147006 = 147 750 750F 30 per hrad (4 7000 Total 22 350 2759 notes direct material Price variana - Actual cost of purchase inca purchase a cot of d at actual quantity direct material labaour rate vanance a actual cost - Standard rate direct manufacturing labour variance, actual costat standard rate and labour. 100006x direct purchased a $465000 materials 100 000 - 465000

Journal entries Particulars Ant Cor) Amt ) Date 450000 1500 o 4 650oo Direct materials al Brice variance a/c Dr To accounts Payable are (To record the dired materals) work in process acc 443250 441248 2202 To direct materials / To efficiency variance (To record the used materials) w 147 750 7350 ork in process acc. labour Price variance ac To wajes payable To labour efficiency (to record the liability) 154 350 750 ₂ and The comment on January 2017 Price a variana of schuyler corporation will be that we can observe the efficiency variana is negligible but the company should try to decrease the Prices of material and labour as to redua Price vano ance.

as Reasons for different time are Z -) TO check reduce the and labor of the company is trying to prices of manufacture materials at time to time - - To check that it remains in reduced state and no signs of increasing also, to ched the efficiency varianca in regular intervals for the same purpose -