Question

Rip Tide Company manufactures surfboards. Its standard cost information follows: Standard Quantity 18.3 59. ft. 8.5 hrs. 3.5 hrs. Direct materials (fiberglass) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($22, eee .385 units) Standard Price (Rate) $4.3 per 54. ft. $ 14 per hr. $ 4 per hr. Standard Unit Cost $ 78.69 119. 34.ee 72.13 Rip Tide has the following actual results for the month of June: Number of units produced and sold Number of square feet of fiberglass used Cost of fiberglass used Number of labor hours worked Direct labor cost Variable overhead cost Fixed overhead cost 5,320 $ 27,038 1, 545 $ 22,557 $ 5,488 $21, se Required: 1 & 2. Prepare the journal entries to record the direct materials, direct labor costs and related variances for Rip Tide. Assume the company purchases raw materials as needed and does not maintain any ending inventories. (If no entry is required for a transaction/event, select "No Journal Entry Required in the first account field. Do not round Intermediate calculations and round your final answers to nearest dollar amount.) View transaction lict Journal entry worksheet 12 Record the entry for direct materials costs and variances. Note: Enter dabits before credits Transaction General Journal Debit Credit Racord entry Clear entry View general Journal

#2 Record the entry for direct labor cost and variances

Answer 1

Answer

• General working

Actual DATA for		190	units
	Quantity (AQ)	Rate (AR)	Actual Cost
Direct Material	5380	$                   5.02	$           27,030.00
Direct labor	1545	$                14.60	$           22,557.00

Standard DATA for		190	units
	Quantity (SQ)	Rate (SR)	Standard Cost
	[A]	[B]	[A x B]
Direct Material	( 18.3 sq ft x 190 units)=3477 sq ft	$                   4.30	$       14,951.10
Direct labor	( 8.5 hours x 190 units)=1615 hours	$                14.00	$       22,610.00

• Requirement 1

Accounts Titles	Debit	Credit
Raw material Inventory	$                                                  23,134.00
Material Price variance	$          3,896.00
Accounts payable (or Cash if Cash is paid)		$        27,030.00
(to record purchase)
Work In Process Inventory	$                                                  14,951
Material Quantity variance	$                                                     8,183
Raw material Inventory		$        23,134.00

--Working

Material Price Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Quantity
(	$                                4.30	-	$                       5.02	)	x	5380
	-3896
	Variance		$              3,896.00			Unfavourable-U
Material Quantity Variance
(	Standard Quantity	-	Actual Quantity	)	x	Standard Rate
(	3477	-	5380	)	x	$                           4.30
	-8182.9
	Variance		$              8,182.90			Unfavourable-U

• Requirement 2

Accounts Titles	Debit	Credit
Direct Labor cost	$                                                  21,630.00
Labor Price variance	$                                                        927.00
Factory Wages payable		$        22,557.00
Work In Process Inventory	$                                                  22,610.00
Labor Quantity or Efficiency Varaince		$              980.00
Direct Labor cost		$        21,630.00

--Working

Labor Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$                              14.00	-	$                    14.60	)	x	1545
	-927
	Variance		$                  927.00			Unfavourable-U
Labour Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	1615	-	1545	)	x	$                        14.00
	980
	Variance		$                  980.00			Favourable-F