Exercise 11-1 Microsoft Edge edugenwiley plus.com/edugen/shared/assignment/test/
ID: 2455201 • Letter: E
Question
Exercise 11-1 Microsoft Edge edugenwiley plus.com/edugen/shared/assignment/test/gprint.uni *Exercise 11-13 Quality Cabinet Company uses a standard costing system and produced 1,830 cabinets during May. The standard cost of wood is $22 per linear foot, and the standard quantity for each cabinet is 29 linear feet. During May, the company purchased 56,070 linear feet of wood for $1,121,400, and 54,270 feet were used in production. The company purchases all materials on account. Determine the material price variance and the material quantity variance. (Enter all variances as a positive number.) Material Price Variance Material Quantity Variance Record the related journal entries for May. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit purch (To record material used in production) Question Attempts: 0 of 5 used Copyright 2000-2015 by John Wiley & Sons, Inc. or related companies. All rights reserved 8:37 PM O Ask me anything 11/26/2015Explanation / Answer
Material Price Variance = Actual quantity purchased ( Standard price - Actual price)
= 56070 ( 22 - 20*)
= $ 112140 (F) [ F denotes Favourable]
* Actual price = 1121400 / 56070 = 20
Material Quantity Variance = Standard price ( Standard quantity for actual output - Actual quantity used in production)
= 22 (53070** - 54270)
= $ 26400(A) [ A denotes Adverse i.e., negative ]
** Standard quantity for actual output = 29 * 1830 = 53070
Journal Entries:- (A) For Purchase of Material:-
1. If Company is Maintaining Non-integrated System of accounts:- ( For Purchase of Material)
a) In financial books,
Purchases A/c Dr. 1121400
To Creditors A/c 1121400
b) In cost books,
Stores ledger control A/c Dr. 1121400
To Cost ledger control A/c 1121400
2. If Company is Maintaining Integrated System of accounts:- ( For Purchase of Material)
a) In financial books,
Purchases A/c Dr. 1121400
To Creditors A/c 1121400
b) In cost books,
Stores ledger control A/c Dr. 1121400
To Creditors A/c 1121400
(B) For Material used in production :- (at actual price) = 54270 * 20 =$ 1085400
1. If Company is Maintaining Non-integrated System of accounts:- ( For Material used in production)
a) In financial books,
No Entry
b) In cost books,
W.I.P. Ledger Control A/c Dr. 1085400
To Stores ledger control A/c 1085400
2. If Company is Maintaining Integrated System of accounts:- ( For Material Used in production)
a) In financial books,
No entry
b) In cost books,
W.I.P. ledger Control A/c Dr. 1085400
To Stores ledger control A/c 1085400
Material Price Variance $ 112140 (F) Material quantity Variance $ 26400 (A)Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.