Direct Labor and Direct Materials Variances, Journal Entries Jameson Company produces paper towels. The company...
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Accounting
Direct Labor and Direct Materials Variances, Journal Entries
Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels:
Paper pulp (3 lbs. @ $0.40)
$ 1.20
Labor (2 hrs. @ $12)
24.00
Total prime cost
$25.20
During the first quarter of the year, Jameson produced 45,000 cases of paper towels. The company purchased and used 135,700 pounds of paper pulp at $0.38 per pound. Actual direct labor used was 91,000 hours at $12.10 per hour.
Required:
Instructions for parts 1 and 2: If a variance is zero, enter "0" and select "Not applicable" from the drop-down box.
Question Content Area
1. Calculate the direct materials price and usage variances.
Materials Price Variance
$
FavorableUnfavorableNot applicable
Materials Usage Variance
$
FavorableUnfavorableNot applicable
2. Calculate the direct labor rate and efficiency variances.
Labor Rate Variance
$
FavorableUnfavorableNot applicable
Labor Efficiency Variance
$
FavorableUnfavorableNot applicable
Question Content Area
3. Prepare the journal entries for (1) the direct materials price variance, (2) the direct materials usage variance, and (3) the direct labor variances. If an amount box does not require an entry, leave it blank or enter "0".
