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Assume Dunst Consulting has created a standard cost card for each job. Standard direct materials per...

Assume Dunst Consulting has created a standard cost card for each job. Standard direct materials per job include 12 software packages at a cost of $ 1,150per package. Standard direct labor costs per job include 95 hours at $ 200 per hour. Dunst plans on completing 11 jobs during March

2018. Actual direct materials costs for March included 75 software packages at a total cost of $ 90,000.

Actual direct labor costs included 120 hours per job at an average rate of $ 208 per hour. Dunst completed all 11 jobs in March.

Calculate direct materials cost and efficiency variances.

Calculate direct labor cost and efficiency variances

Prepare journal entries to record the use of both materials and labor for march for the company

Solutions

Expert Solution

Std Package allowed for actual jobs (12*11): 132
Std price per package: 1150
Actual Package: 75
Actual price (90000/75): 1200
Material cost variance = Sstd Qty*Std price - Actual Qty*Actual price
132 *1150 - 1200 *75 = 61800 F
Material efficiency variance = Std price (Std qty-Actual Qty)
1150 (132-75) = 65550 F
Std labour hours allowed (11*95):   1045 hours
Std rate per hour: 200 per hour
Actual labour hours: (11*120): 1320 hours
Actual rate per hour: 208
Labour cost variance = Std hours*Std rate - Actual hours*Actual rate
1045 *200 - 1320 *208 = 65560 U
Labouor Efficiency variance = Std rate (Std hours-Actual Hours)
200 (1045-1320)= 55000 U
Journal entries for usage of material and labouor:
Work in process inventory Dr. (132*1150) 151800
    Material Inventory control Account (75*1150) 86250
     Material efficiency Variance 65550
Work in Process inventory Dr. (1045*200) 209000
Labour efficiency Variance Dr. 55000
     Manufacturing wages Account (1320*200) 264000

ekkarill92 answered 2 years ago
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