Standard Cost in Process Costing; All Variances and Journal Entries Dash Company adopted a standard costing system several years ago. The standard costs for the prime costs (i.e., direct materials + direct labor) of its single product are
Material | (8 kilograms x $5.00/kg) | $ 40.00 |
Labor | (6 hours x $18.20/hr.) | $109.20 |
All materials are added at the beginning of processing. The following data were taken from the company’s records for November:
In-process beginning inventory | none |
|
In-process ending inventory | 800 | Units, 75 percent complete as to labor |
Units completed | 5,600 | Units |
Budgeted output | 6,000 | Units |
Purchases of materials | 50,000 | Kilograms |
Total actual labor costs | $600,000 |
|
Actual hours of labor | 36,500 | Hours |
Materials usage variance | $1,500 | Unfavorable |
Total materials variance | $750 | Unfavorable |
Required
1. Compute for November:
a. The labor efficiency variance.
b. The labor rate variance.
c. The actual number of kilograms of material used in the production process during the month.
d. The actual price paid per kilogram of material during the month.
e. The total amounts of material and labor cost transferred to the finished goods account.
f. The total amount of material and labor cost in the work-in-process inventory account at the end of November.
2. Prepare journal entries to record all transactions including the variances in requirement 1.
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