Question

Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows:

	Standard Quantity		Standard Price (Rate)			Standard Unit Cost
Direct materials (clay)	1.6	lbs.	$	1.80	per lb.	$	2.88
Direct labor	2.1	hrs.	$	8.00	per hr.		16.80
Variable manufacturing overhead (based on direct labor hours)	2.1	hrs.	$	2.10	per hr.		4.41
Fixed manufacturing overhead ($245,410 ÷ 97,000 units)							2.53

Barley Hopp had the following actual results last year:

Number of units produced and sold		115,200
Number of pounds of clay used		190,000
Cost of clay	$	304,000
Number of labor hours worked		160,200
Direct labor cost	$	542,700
Variable overhead cost	$	223,200
Fixed overhead cost	$	350,000

Required:
Prepare the journal entry to record Barley Hopp’s fixed manufacturing overhead costs and related variances for last year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Journal entry worksheet

• Record the entry for fixed manufacturing overhead costs and variances.

Note: Enter debits before credits.

	Transaction General Journal Debit Credit 1

Answer 1

Solution:

Journal Entries - Barley Hopp
Event	Particulars	Debit	Credit
1	Manufacturing overhead Dr	$245,410.00
	Fixed overhead spending variance Dr	$104,590.00
	To Cash		$350,000.00
	(To record fixed manufacturing overhead incurred)
2	Work in process Dr (115200*$2.53)	$291,456.00
	To Manufacturing overhead		$245,410.00
	To Fixed overhead volume variance		$46,046.00
	(To record fixed overhead applied)