Question

HOW DO I CALCULATE?

Hart Company made 3,240 bookshelves using 22,240 board feet of wood costing $295,792. The company's direct materials standards for one bookshelf are 8 board feet of wood at $13.20 per board foot. 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 1 Required 2 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 Record entry Clear entry View general journal

Answer 1

Solution :

Direct Material Cost Variance
Actual Cost					Standard cost for actual quantity					Standard Cost
AQ *	AP =				AQ *	SP =				SQ *	SP =
22240	$13.30	$295,792.00			22240	$13.20	$293,568.00			25920	$13.20	$342,144.00
			$2,224.00	U				$48,576.00	F
			Direct Material Price Variance					Direct Material Qty variance
Direct material price variance					$2,224.00	U
Direct material quantity variance					$48,576.00	F
Direct material cost variance					$46,352.00	F

Journal Entries - Hart Company
Event	Particulars	Debit	Credit
1	Work in Process Inventory Dr	$342,144.00
	Direct material Price variance Dr	$2,224.00
	To Accounts payable		$295,792.00
	To Direct material quantity variance		$48,576.00
	(To record purchase and use of material)
2	Direct material quantity variance Dr	$48,576.00
	To Direct material price variance		$2,224.00
	To Cost of goods sold		$46,352.00
	(To close material variance to cost of goods sold)