TLA Inc. makes a unit called EV. EV has a standard of 3 yards of fabric for each EV. There is no beginning inventory of fabric. The standard price per yard of fabric is $2. During the period, TLA made 8,000 EVs. TLA purchased and used 16,800 yards of fabric and incurred an actual cost of $48,500 for the fabric. If TLA uses a standard cost system the journal entry to record the materials purchase should include a ______ to Materials Control in the amount of ______.
TLA Inc. makes a unit called EV. EV has a standard of 3 yards of fabric for each EV. There is no beginning inventory of fabric. The standard price per yard of fabric is $2. During the period, TLA made 8,000 EVs. TLA purchased and used 16,800 yards of fabric and incurred an actual cost of $48,500 for the fabric. If TLA uses a standard cost system the journal entry to record the materials purchase should include a ______ to Materials Control in the amount of ______.
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Related questions
Herzog Clothiers manufactures women's business suits. Thecompany uses a standard cost accounting system. In March 2012,15,700 suits were made. The following standard and actual cost dataapplied to the month of March when normal capacity was 20,000direct labor hours. All materials purchased were used inproduction.
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Overhead is applied on the basis of direct labor hours. Atnormal capacity, budgeted fixed overhead costs were $126,000, andbudgeted variable overhead costs were $60,000.
Instructions
| (a) | Compute the total, price, and quantity variances for (1)materials and (2) labor. (a) MPV $30,400 U |
| (b) | Compute the total overhead variance. |
| (c) | Which of the materials and labor variances should beinvestigated if management considers a variance of more than 5%from standard to be significant? |
Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system:
| Inputs | (1) Standard Quantity or Hours | (2) Standard Price or Rate | Standard Cost (1) Ã (2) | ||||
| Direct materials | 6 | pounds | $ | 3 | per pound | $ | 18.00 |
| Direct labor | 0.8 | hours | $ | 15 | per hour | $ | 12.00 |
| Variable manufacturing overhead | 0.8 | hours | $ | 3 | per hour | $ | 2.40 |
| Total standard cost per unit | $ | 32.40 | |||||
| Total | Variances Reported | |||||||
| Standard Cost* | Price or Rate | Quantity or Efficiency | ||||||
| Direct materials | $ | 405,000 | $ | 6,900 | F | $ | 9,000 | U |
| Direct labor | $ | 270,000 | $ | 14,550 | U | $ | 21,000 | U |
| Variable manufacturing overhead | $ | 54,000 | $ | 1,300 | F | $ | ? | U |
*Applied to Work in Process during the period.
The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored.
Required:
1. How many units were produced last period?
2. How many pounds of direct material were purchased and used in production?
3. What was the actual cost per pound of material? (Round your answer to 2 decimal places.)
4. How many actual direct labor-hours were worked during the period?
5. What was the actual rate paid per direct labor-hour? (Round your answer to 2 decimal places.)
6. How much actual variable manufacturing overhead cost was incurred during the period?
Reference links
Using Standard CostsâDirect Labor Variancesopens in a new window
Using Standard CostsâDirect Materials Variances
