Exercise 11-22 Levine Inc., which produces a single product, has prepared the fo

Question

Exercise 11-22 Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (8 pounds at $2.80 per pound) Direct labor (6 hours at $14.00 per hour) During the month of April, the company manufactures 160 units and incurs the following actual costs. Direct materials purchased and used (1,330 pounds) Direct labor (990 hours) Journalize the entries to record the materials and labor variances. (Credit account titles are automatically indented when amount is entered. Do not indent manually $22.40 $84.00 $3,857 $13,563 Round answers to 0 decimal places, e.g. 125.)

Explanation / Answer

Standard Cost: Main Answer Journal Entries Amount Dr. Amount Cr. Particulars Qty Rate Amt Direct Material 8 2.80 22.40 A Materials Account Dr.(1330*2.80) 3724 Direct Labor 6 14.00 84.00 Materials Price Variance Dr. 133 106.40 To Accounts Payable(1330*2.90) 3,857 Units 160 (Being Material Price Variance Recorded) Standard Cost for Actual: B WIP Account Dr.(1280*2.80) 3,584 Particulars Qty Rate Amt Materials Qty Variance Dr. 140 Direct Material 1280 2.80 3,584 To Materials Account(1330*2.80) 3,724 Direct Labor 960 14.00 13,440 (Being Material Eff Variance Recorded) 17,024 Actual Cost for Actual Production: C Labor Account Dr.(990*14.00) 13860 Particulars Qty Rate Amt To Wages Price Variance 297 Direct Material 1330 2.90 3,857 To Wages Payable(990*13.70) 13,563 Direct Labor 990 13.70 13,563 (Being Labor Price Variance Recorded) 17,420 D WIP Account Dr.(960*14.00) 13,440 A Material Price Variance: F/A Total Material Labor Eff Variance Dr. 420 (SP-AP)Actual Qty Consumed Variance To Labor Account(990*14.00) 13,860 (2.80-2.90)*1330 (Being Labor Eff Variance Recorded) -133 A B Material Usage Variance: (SQ-AQ)SP (1280-1330)2.80 -140 A -273 C Labor Price Variance: Total Labor (SP-AP)Actual Hours Variance (14-13.70)*990 297 F D Labor Eff Variance: (SH-AH)SP (960-990)14 -420 A -123 E VOH Price Variance: Total VOH (SP-AP)Actual Hours Variance (6-6.50)*2610 -1305 A F VOH Eff Variance: (SH-AH)SP (2400-2610)6 -1260 F -2565

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