Question

Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller.

  

Direct Labor:	Direct Material:
Quantity, 0.19 hour	Quantity, 6 kilograms
Rate, $9.50 per hour	Price, $0.48 per kilogram

  

Actual material purchases amounted to 229,600 kilograms at $0.550 per kilogram. Actual costs incurred in the production of 28,000 units were as follows:

Direct labor:	$59,094 for 5,880 hours
Direct material:	$100,870 for 183,400 kilograms

1. Record the purchase of direct material on account and the direct-material purchase price variance.

2. Record the addition of direct-material cost to work-in-process inventory and the direct-material quantity variance.

3. Record the addition of direct-labor cost to work-in-process inventory and the direct-labor variances.

4. Record the closing of the direct-material and direct-labor variances to cost of goods sold.

Answer 1