Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its st

Question

Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows: Standard Standard Price Quantity 1.5 lbs.1.10 per lb 2.2 hrs. 10.00 per hr. Standard Unit Cost 1.65 Rate) Direct materials (clay) Direct labor Variable manufacturing overhead (based on 22 hrs. 2.00 per hr Fixed manufacturing overhead ($296,010 4.40 direct labor hours) 2.53 117,000 units) Barley Hopp had the following actual results last year: Number of units produced and sold Number of pounds of clay used Cost of clay Nurmber of labor hours worked Direct labor cost Variable overhead cost Fixed overhead cost 106,000 189,000 S 179,550 203,200 S2,336,800 S 447,040 S 265,000 Required: 1, 2,& 3. Prepare the joumal entries to record the direct materials, direct labor, variable overhead costs and related variances for Barley Hopp. Assume the company purchases raw materials as needed and does not maintain any ending inventories. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Explanation / Answer

DR CR Cost of goods sold (106000*1.65) 174900 Direct Material Quantity variance (189000-(106000*1.5))*1.10 33000 Direct Material Price Variance (189000*1.10-179550) 28350 Cash or Account Payable 179550 Direct Labor Rate Variance =-(203200*10-2336800) 304800 Direct Labor Rate Efficiency Variance =-(203200-106000*2.2)*10 300000 Cost of goods sold 2332000 Cash or Account Payable 2336800 Variable overhead Rate Variance 447040-(203200)*2 40640 Variable overhead Efficiency Variance (203200-106000*2.2)*2 60000. Cost of Goods sold 466400 Cash or Account Payable 447040

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