Freiling Corporation manufactures one product. It does not maintain any beginning or ending Work in Process inventories. The company uses a standard cost system in which inventories are recorded at their standard costs. There is no variable manufacturing overhead. The standard cost card for the company's only product is as follows:InputsStandard Quantityor HoursStandard Price or RateStandard CostDirect materials3.1kilos$6.00per kilo$18.60Direct labor0.90hours$22.00per hour 19.80Fixed manufacturing overhead0.90hours$9.50per hour 8.55Total standard cost per unit $ 46.95During the year, the company assigned direct labor costs to work in process. The direct labor workers (who were paid in cash) worked 14,890 hours at an average cost of $22.80 per hour.Assume that all transactions
are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) stands for Property, Plant, and Equipment net of depreciation.?CashRaw MaterialsWork in ProcessFinished GoodsPP&E (net)=Materials Price VarianceMaterials Quantity Variance1/1$1,090,000$53,940$0$79,815$600,000=$0$0?Labor Rate VarianceLabor Efficiency VarianceFOH Budget VarianceFOH Volume VarianceRetained Earnings1/1$0$0$0$0$1,823,755When the direct labor cost is recorded in transaction (c) above, which of the following entries will be made?
A. $8,800 in the Labor Efficiency Variance column
B. ($8,800) in the Labor Efficiency Variance column
C. ($8,800) in the Labor Rate Variance column
D. $8,800 in the Labor Rate Variance column
Answer: B
You might also like to view...
A turnaround strategy is a type of renewal strategy used when an organization is in serious trouble.
Answer the following statement true (T) or false (F)
A primary focus of the practice of public relations is ________
A) trying to influence an individual's attitude—how he or she thinks on a given topic B) tracking public opinion C) burning incense to the unknown god of public opinion D) detecting vulnerabilities of culture driven by media, fueled by the Internet and dominated by a celebrity
Which of the following factors that affect market growth rates refers to the degree to which a new product is perceived as better at satisfying customer needs than the product it supersedes?
a. Complexity b. Relative advantage c. Compatibility d. Trialability e. Observability
European Works Councils are intended to:
A. Provide collective bargaining for workers. B. Assist in mediating labor disputes. C. Provide information to workers that can lead to cooperation between management and labor. D. Determine country labor laws and minimum labor standards.