Assignment 10B-6
April 20, 2022
This assignment is an application on standard costing (chapter11), using the
traditional journal entries with debits and credits.
Read problem 10B-6 on pages 495-496 of your Managerial Accounting textbook (Garrison, Noreen,
and Brewer, 17th edition) and answer the following questions:
1. Calculate the direct material variances and prepare the journal entries (items a and b). Materials
price variance = AQ (AP-SP) = 460,000 (26.5-25) = 690,000 U Materials quantity variance = SP
(AQ-SQ) = 25 (430,000-125,000*3) = 1375,000 U
2. Calculate the direct labor variances and prepare the journal entries (item c). Labor rate variance =
AH (AR-SR) =265,000 (15-16) = 265,000 F Labor efficiency variance = SR (AH-SH) = 16 (265,000
- 125,000*2) = 240,000 U
3. Calculate the variable overhead variances and prepare the journal entries (item d). Overhead rate
variance = AH (AR-SR) = 265,000 (1.81-2) = 50,000 F Overhead efficiency variance = SR (AH-SH)
= 2 (265,000 - 250,000) = 30,000 U
4. Calculate the fixed overhead variances and prepare the journal entries (item e). Budget variance =
Actual fixed overhead - Budgeted fixed overhead = 2,450,000 - (2,880,000 - 240,000 * 2） =
2,450,000 - 2,400,000 = 50,000 U
Volume variance = Budget fixed overhead - Fixed overhead applied to work in process = 2,400,000 (125,000 *2 ) *10 2,400,000 - 2,500,000 = 100,000 F
5. Prepare the journal entries (debits and credits) for items f, g, h, i, and J.
Caption
6. Prepare the standard cost income statement for the year.
Caption