Question

TIhe following information applies to the questions displayed below.j Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller. Direct Labor Quantity, 0.25 hour Rate, $16 per hour Direct Material: Quantity, 4 kilograms Price, $0.80 per kilogram Actual material purchases amounted to 240,000 kilograms at $.81 per kilogram. Actual costs incurred in the production of 50,000 units were as follows: Direct labor Direct material $211,900 for 13,000 hours $170, 100 for 210,000 kilograms Required: Post the journal entries prepared above to the appropriate T-accounts below. Be sure to select from the dropdown menu th transaction number associated with each amount posted. Raw-Material Inventory Direct-Material Purchase Price Variance Work-in-Process Inventory Direct-Material Quantity Variance Accounts Payable Direct-Labor Rate Variance Wages Payable Direct-Labor Efficiency Variance

Answer 1

T-Accounts:
Raw-Materials Inventory
Accounts Payable (240,000*$0.81)	$194,400	Work-in-Process Inventory	$170,100
		Balance	$24,300
	$194,400		$194,400
Work-in-Process Inventory
Raw-Materials Inventory	$170,100	Balance	$382,000
Direct Labor	$211,900
	$382,000		$382,000
Accounts Payable
Balance	$194,400	Raw-Materials Inventory	$194,400
	$194,400		$194,400
Wages Payable
Balance	$211,900	Wage Expenses	$211,900
	$211,900		$211,900

Direct-Materials Purchase Price Variance:

Direct-Materials Purchase Price Variance = Actual Purchase Price - Standard Price * Actual Quantity

Direct-Materials Purchase Price Variance = $0.81 - $0.80 * 240,000

Direct-Materials Purchase Price Variance = $2,400 Unfavorable

Direct materials quantity variance:

Direct materials quantity variance = Actual Quantity - Standard Quntity * Standard Price

Direct materials quantity variance = 210,000 - (4 kilograms * 50, units) * $0.80

Direct materials quantity variance = (210,000 - 200,000) * $0.80

Direct materials quantity variance = $8,000 Unfavorable

Direct labor rate variance:

Direct labor rate variance = Actual Rate - Standard Rate * Actual Hours

Direct labor rate variance = ($211,900/13,000 hours) - $16 * 13,000 hours

Direct labor rate variance = ($16.30 - $16 ) * 13,000 hours

Direct labor rate variance = $3,900 Unfavorable

Direct labor efficiency variance:

Direct labor efficiency variance = Actual Hours - Standard Hours * Standard Rate

Direct labor efficiency variance = (13,000 hours - [50,000 units * 0.25 hours]) * $16 per hour

Direct labor efficiency variance = (13,000 hours - 12,500 hours) * $16 per hour

Direct labor efficiency variance = $8,000 Unfavorable