Asked by Sandra Vappie on Apr 29, 2024
Verified
The following information comes from the records of Barney Co.for the current period.
a.Compute the direct materials price and quantity variances,direct labor rate and efficiency variances and state whether the variance is favorable or unfavorable.
b.Prepare the journal entries to charge direct materials and direct labor costs to work in process and the materials and labor variances to their proper accounts.
Direct Materials Price Variances
The difference between the actual cost of direct materials used in production and the standard cost expected to be used, showing how effectively materials costs are managed.
Direct Labor Rate Variances
The difference between the expected cost of direct labor per unit of production and the actual cost incurred.
Work in Process
Partially finished goods that are still in the production process at a specific point in time.
- Evaluate the fluctuations in direct materials' price and amount.
- Analyze labor cost deviations, with particular emphasis on rate and efficiency.
- Construct entries in financial journals for differences and standard costing adjustments.
Verified Answer
Learning Objectives
- Evaluate the fluctuations in direct materials' price and amount.
- Analyze labor cost deviations, with particular emphasis on rate and efficiency.
- Construct entries in financial journals for differences and standard costing adjustments.
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