Acc400 Accounting for Decision Making: P24.7 The accountants for Polyglaze, Inc., have developed

Acc400 Accounting for Decision Making
Problem 24.7 Computing and Journalizing Cost Variances
The accountants for Polyglaze, Inc., have developed the following information regarding the standard cost and the actual cost of a product manufactured in June:
Standard Cost Actual Cost
Direct materials:
Standard: 10 ounces at $0.15 per ounce 1.50
Actual: 11 ounces at $0.16 per ounce 1.76

Direct labor:
Standard: .50 hours at $10.00 per hour 5.00
Actual: .45 hours at $10.40 per hour 4.68

Manufacturing overhead:
Standard: $5,000 fixed cost and $5,000 variable cost for 10,000 units normal monthly volume 1.00
Actual: $5,000 fixed cost and $4,600 variable cost for 8,000 units actually produced in June 1.20
Total Unit Cost $7.50 $7.64

Units produced 8,000

Instructions
a. Compute the materials price variance and the materials quantity variance, indicating whether each is favorable or unfavorable. Prepare the journal entry to record the cost of direct materials used during June in the Work in Process account (at standard).
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