answer%20of%20ch7.doc[1]

answer%20of%20ch7.doc[1] - 7-24 1(30 min Price and...

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7-24 (30 min.) Price and efficiency variances, journal entries. 1. Direct materials and direct manufacturing labor are analyzed in turn: Actual Costs Incurred (Actual Input Qty. *Actual Price) Actual Input Qty. *Budgeted Price Flexible Budget (Budgeted Input Qty. Allowed for Actual Output *Budgeted Price) Direct Materials (100,000 $4.65 ) * a $465,000 Purchases Usage (100,000 $4.50) * (98,055 $4.50) * $450,000 $441,248 (9,850 10 $4.50) * * $443,250 $15,000 U $2,002 F Price varianc e Efficiency variance Direct Manufacturing Labor (4,900 $31.5 ) * b $154,350 (4,900 $30) * $147,000 (9,850 0.5 $30) or * * (4,925 $30) * $147,750 $7,350 U $750 F Price variance Efficiency variance a $465,000 /100,000 = $4.65 b $154,350 /4,900 = $31.5 2. Direct Materials Control 450,000 Direct Materials Price Variance 15,000 Accounts Payable or Cash Control 465,000 Work-in-Process Control 443,250 Direct Materials Control 441,248 Direct Materials Efficiency Variance 2,002 Work-in-Process Control 147,750 Direct Manuf. Labor Price Variance 7,350 Wages Payable Control 154,350 Direct Manuf. Labor Efficiency Variance 750 3. Some students?comments will be immersed in conjecture about higher prices for materials, better quality materials, higher grade labor, better efficiency in use of materials, and so forth. A possibility is that approximately the same labor force, paid somewhat more, is taking slightly less time with better materials and causing less waste
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This note was uploaded on 05/11/2010 for the course QWE 12314 taught by Professor 1231 during the Spring '10 term at École Normale Supérieure.

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answer%20of%20ch7.doc[1] - 7-24 1(30 min Price and...

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