Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello

تمرين 29

AgriChem Industries manufactures fertilizer concentrate and uses cost standards. The fertilizer is produced in 500-pound batches; the normal level of production is 250 batches of fertilizer per month. The standard costs per batch are as follows:
During January, the company temporarily reduced the level of production to 200 batches of fertilizer. Actual costs incurred in January were as follows:
Instructions
You have been engaged to explain in detail the elements of the $5,250 net unfavorable cost variance and to record the manufacturing costs for January in the company's standard cost accounting system.
a. As a first step, compute the materials price and quantity variances, the labor rate and efficiency variances, and the overhead spending and volume variances for the month.
b. Prepare journal entries to record the flow of manufacturing costs through the standard cost system and the related cost variances. Make separate entries to record the costs of direct materials used, direct labor, and manufacturing overhead. Work in Process Inventory is to be debited only with standard costs.