Wendell Productions makes separate journal entries for all cost accounting-relat

Question

Wendell Productions makes separate journal entries for all cost accounting-related activities. It uses a standard cost system for all manufacturing items. For the month of June, the following activities have taken place:

        Direct Manufacturing Materials Purchased                $310,000

        Direct Manufacturing Materials Used                             250,000

        Direct Materials Price Variance                                           10,000    unfavorable

            (at time of purchase)

        Direct Materials Efficiency Variance                                    5,000    favorable

        Direct Manufacturing Labor Price Variance                      9,000    favorable

        Direct Manufacturing Labor Efficiency Variance             4,000    favorable

        Direct Manufacturing Labor Payable                              167,000

Required:

Record the necessary journal entries to close the accounts for the month.    

Explanation / Answer

Journal Entries for Variance Account Title Dr $ Cr $       1 Direct Material Inventory         310,000 Direct Material Price Variance             10,000 Accounts Payable          320,000       2 Work In Process         255,000 Direct Material Efficiency Variance               5,000 Direct Material Inventory          250,000       3 Work In Process         180,000 Direct Manufacturing Labor Price Variance               9,000 Direct Manufacturing Labor Efficiency Variance               4,000 Direct Manufacturing Labor Payable          167,000

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