Dash Company adopted a standard costing system several years ago. The standard costs for the prime costs (i.e., direct materials and direct labor) of its single product are:
Material (5 kilograms × $5.00 per kilogram) $ 25.00 Labor (6 hours × $19.50 per hour) 117.00
All materials are added at the beginning of processing. The following data were taken from the company's records for November:
In-process beginning inventory None In-process ending inventory 800 units, 70% to direct labor Units completed 6,400 units Budgeted output 6,800 units Purchases of materials 58,000 kilograms Total actual direct labor costs $ 750,000 Actual direct labor hours 41,000 hours Materials usage variance $ 2,300 Unfavorable Total materials variance $ 850 Unfavorable
1. Compute for November:
a. The direct labor efficiency variance. Is this variance favorable (F) or unfavorable (U)?
b. The direct labor rate variance. Is this variance favorable (F) or unfavorable (U)?
c. The actual number of kilograms of material used in the production process during the month.
d. The actual price paid per kilogram of material during the month, the company calculates the direct materials price variance at point of purchase.
e. The amount of direct materials cost and direct labor cost transferred to the Finished Goods Inventory account.
f. The total amount of direct materials cost and direct labor cost in the Work-in-Process Inventory account at the end of the month.
2. Prepare journal entries to record all transactions, including the variances in requirement 1.