Vernon Mills, Inc. is a large producer of men's and women's clothing. The company uses standard costs for all of its products. The standard costs and actual costs per unit of product for a recent period are given below for one of the company's product lines:
During this period, the company produced 4,800 units of this product. A comparison of standard and actual costs for the period on a total cost basis is given below:
There was no inventory of materials on hand at the beginning of the period. During the period, 21,120 yards of materials were purchased, all of which were used in production.
Required:
a. For direct materials, compute the price and quantity variances for the period and prepare journal entries to record all activity relating to direct materials for the period.
b. For direct labor, compute the rate and efficiency variances and prepare a journal entry to record the incurrence of direct labor cost for the period.
c. For variable overhead, compute the rate and efficiency variances.

Question

Vernon Mills, Inc. is a large producer of men's and women's clothing. The company uses standard costs for all of its products. The standard costs and actual costs per unit of product for a recent period are given below for one of the company's product lines:  
During this period, the company produced 4,800 units of this product. A comparison of standard and actual costs for the period on a total cost basis is given below:  
There was no inventory of materials on hand at the beginning of the period. During the period, 21,120 yards of materials were purchased, all of which were used in production.
Required:
a. For direct materials, compute the price and quantity variances for the period and prepare journal entries to record all activity relating to direct materials for the period.
b. For direct labor, compute the rate and efficiency variances and prepare a journal entry to record the incurrence of direct labor cost for the period.
c. For variable overhead, compute the rate and efficiency variances.

Quizplus · Accepted Answer

The Answer of Vernon Mills, Inc. is a large producer of men's and women's clothing. The company uses standard costs for all of its products. The standard costs and actual costs per unit of product for a recent period are given below for one of the company's product lines:  
During this period, the company produced 4,800 units of this product. A comparison of standard and actual costs for the period on a total cost basis is given below:  
There was no inventory of materials on hand at the beginning of the period. During the period, 21,120 yards of materials were purchased, all of which were used in production.
Required:
a. For direct materials, compute the price and quantity variances for the period and prepare journal entries to record all activity relating to direct materials for the period.
b. For direct labor, compute the rate and efficiency variances and prepare a journal entry to record the incurrence of direct labor cost for the period.
c. For variable overhead, compute the rate and efficiency variances.