Question:
Journal entries for materials and labor variances
Suzy-Q Corporation has established the following standard cost per unit:
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Materials-55 lb@$220 per lb
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$12.10
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Labor-18 hr@$625 per hr
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11.25
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Although 10,000 units were budgeted, only 8,800 units were produced. The purchasing department bought 55,000 pounds of materials at a cost of $123,750. Actual pounds of materials used were 54,305. Direct labor cost was $127,400 for 18,200 hours worked.
Required:
1. Make journal entries to record the materials transactions, assuming that the materials price variance was recorded at the time of purchase.
2. Make journal entries to record the labor variances.