Information on Grand Corporation's direct materials costs follows. Quantities of chemical Y purchased and used Actual...

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Information on Grand Corporations direct materials costs follows. Quantities of chemical Y purchased and used Actual cost of

View transaction list Journal entry worksheet look Record the purchase and use of chemical Y using standard costing. Print ve

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Answer 1

Answer #1

(a)


Direct Materials price variance	$21,840	F
Direct Materials efficiency variance	$36,640	U

Explanation:-

Actual costs = $427,000

Actual inputs at standard price = $22.9 × 19,600 = $448,840

Flexible budget (standard inputs allowed for good output) = $22.9 × 18,000 = $412,200

Price variance = $427,000 - $448,840 = $21,840 F

Efficiency variance = $448,840 - $412,200 = $36,640 U

(b)

Event	General Journal	Debit	Credit
1	work-in-process inventory	$412,200
	Materials efficiency variance	$36,640
	Materials price variance		$21,840
	Account payable		$427,000
	(To record the purchase and use of chemical Y using standard costing)

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