Exercise 23-22 Levine Inc., which produces a single product, has prepared the fo

Question

Exercise 23-22

Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product.

During the month of April, the company manufactures 290 units and incurs the following actual costs.

Journalize the entries to record the materials and labor variances. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 125.)

Account Titles and Explanation

Debit

Credit

Direct materials (9 pounds at $3.30 per pound) $29.70 Direct labor (3 hours at $14.00 per hour) $42.00

Explanation / Answer

Material Price Variance =(actual price - std. price) Actual usage = [(9310/2660) - 3.30]*2660 = $532U

Material Quantity Variance = (Std usage for actual units - actual used) Std. price=[(290*9) - 2660] * 3.30 = $165U

Journal Entry:

Debit Material $8778

Debit MPV 532

Credit Accounts Payable $9310

============

Debit WIP $8613

Debit MQV 165

Credit Material $8778

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Labor Rate Variance = [(12104/890) - 14]* 890 = $356F

Labor Efficiency Variance = [(290*3) - 890) * 14 = $280U

Journal Entry :

Debit WIP (290*3*14) $12180

Debit LEV 280

Credit LRV $356

Credit Wages Payable (890*13.6) $12104

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