E22-19 Haslett Inc., which produces a single product, has prepared the following
ID: 2389390 • Letter: E
Question
E22-19Haslett Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product.
Direct materials (8 pounds at $2.50 per pound) $20
Direct labor (3 hours at $12.00 per hour) $36
During the month of April, the company manufactures 230 units and incurs the following actual costs.
Direct materials purchased and used (1,900 pounds) $4,940
Direct labor (700 hours) $8,120
Journalize the entries to record the materials and labor variances. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)
Account/Description Debit Credit
(To record materials price variance)
(To record materials quantity variance)
(To record labor price variance)
(To record labor quantity variance)
Explanation / Answer
Total material variance
= (AQ x AP) - (SQ x SP)
(1,900 x $2.60 ) -( 1,840-$2.50)= $340.00
Total material variance = $340.00 ----- Unf
=====================
Material price variance = (AQ * AP) - (AQ * SP)
( 1,900 x $2.60 ) )- (1,900 x $2.50) =$190.00
Material price variance $190.00 ----------Unf
================
Material quantity variance
= (AQ x SP) - (SQ x SP)
( 1,900 x $2.50 ) - ( 1,840x 2.50)
Material quantity variance = $150.00------- Unf
(3) Compute the total labor variance.
Total labor variance = (AH * AR) - (SH * SR)
(700 x $11.60 ) ) –( 690 x12.00
Material price variance = =160.00------- - Fav
=============
Labor price variance = (AH * AR) - (AH * SR)
( (700 x $11.60 ) ) ( 700 x12.00)
Material price variance = 280.00----- Fav
============
Labor price variance = (AH x SR) - (SH x SR)
( (700 x $12.00 ) - (690 x 12.00)
Material price variance = $120.00 ----- Unf
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