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Vartiance+Problem

# Vartiance+Problem - Quiz 5 Name The Muse Corporation...

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Quiz 5 Name ________________________________ The Muse Corporation manufactures birdhouses. It has set up the following standards per finished unit for direct materials and direct manufacturing labor: Direct materials: 10 pounds at \$4.50/lb. Direct labor: 0.5 hour at \$30 per hour The number of finished units budgeted for January 2009 was 10,000; 9,850 units were actually produced. Actual results for January 2009 were: Direct materials: 98,055 lbs. were used Direct labor: 4,900 hours for a total cost of \$154,350 Assume that there was no beginning inventory of either direct materials or finished units. During the month, materials purchases amounted to 100,000 lbs., at a total cost of \$465,000. Required: 1. Compute the January 2009 direct cost variances. 2. Prepare journal entries to record the variances and close the variances to the appropriate account (assume no pro-ration). 1

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Quiz 5 Name ________________________________ 2 1. Direct materials and direct manufacturing labor are analyzed in turn: Actual Costs Incurred (Actual Input Qty. × Actual Price) Actual Input Qty.
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