Question

Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. $20 Direct materials (8 pounds at $2.50 per pound) Direct labor (3 hours at $12.00 per hour) $36 During the month of April, the company manufactures 230 units and incurs the following actual costs. Direct materials purchased and used (1,900 pounds) Direct labor (700 hours) $5,035 $8,120 Journalize the entries to record the materials and labor variances. (Credit account titles are automatically indented w Account Titles and Explanation Debit Credit (To record materials price variance) (To record materials quantity variance) (To record labor price variance) (To record labor quantity variance)

Answer 1

Solution:

Journal Entries - Levine Inc.
Event	Particulars	Debit	Credit
1	Direct material inventory Dr	$4,750.00
	Direct material price variance Dr	$285.00
	To Accounts payable		$5,035.00
	(To record purchase of direct material on account)
2	Work in Process Inventory Dr (230*8*$2.50)	$4,600.00
	Direct material quantity variance Dr	$150.00
	To Direct material inventory		$4,750.00
	(To record use of material into production)
3	Factory wages Dr	$8,400.00
	To Wages payable		$8,120.00
	To Labor price variance		$280.00
	(To record labor cost incurred)
4	Work in Process Inventory Dr (230*3*$12)	$8,280.00
	Labor quantity variance Dr	$120.00
	To Factory Wages		$8,400.00
	(To record labor assigned to production)