In all of the exercises involving variances, use “F” and “U” to designate favorable and...

In all of the exercises involving variances, use “F” and “U” to designate favorable and unfavorable variances, respectively.

Journalizing standard costs in two departments

Mayberry Manufacturing Inc. has two departments, Mixing and Blending. When goods are completed in Mixing, they are transferred to Blending and then to the finished goods storeroom. There was no beginning or ending work in process in either department. Listed below is information to be used in preparing journal entries at the end of October:

Standard cost of direct materials for actual production–Mixing . $ 185,000

Actual cost of direct materials used in production–Mixing. . . . . . . 177,000

Materials price variance–Mixing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000 F

Materials quantity variance–Mixing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 U

Standard cost of direct materials for actual production–Blending 130,000

Actual cost of direct materials used in production–Blending . . . . 136,000

Materials price variance–Blending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000 U

Materials quantity variance–Blending. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 U

Standard cost of direct labor for actual production–Mixing. . . . . . 110,000

Actual cost of direct labor used in production–Mixing . . . . . . . . . . . 103,000

Labor rate variance–Mixing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000 F

Labor efficiency variance–Mixing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000 U

Standard cost of direct labor for actual production–Blending. . . . 95,000

Actual cost of direct labor used in production–Blending . . . . . . . . . 110,000

Labor rate variance–Blending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000 U

Labor efficiency variance–Blending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000 U

Actual factory overhead. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,000

Factory overhead applied–Mixing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,000

Factory overhead applied–Blending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000

Prepare journal entries for the following:

1. The issuance of direct materials into production and the recording of the materials variances.

2. The use of direct labor in production and the recording of the labor variances.

3. The entries to record the actual and applied factory overhead, using a single account for the factory overhead.

4. The entries to transfer the production costs from Mixing to Blending and from Blending to finished goods.