Variances
Illustrative Entries
| 8-31-XX |
Raw Materials Inventory |
328,000 |
||
| Materials Price Variance |
41,000 |
|||
|
Accounts Payable |
369,000 |
|||
| To record purchase of raw materials at standard price and related unfavorable variance |
| 8-31-XX |
Work in Process Inventory |
340,000 |
||
| Raw Materials Inventory |
328,000 |
|||
| Materials Quantity Variance |
12,000 |
|||
| To transfer raw materials to production at standard usage rates and related favorable quantity variance |
| 8-31-XX |
Work in Process Inventory |
183,600 |
||
| Labor Efficiency Variance |
41,400 |
|||
| Labor Rate Variance |
50,000 |
|||
|
Wages Payable |
175,000 |
|||
| To increase work in process for the standard direct labor costs, and record the related efficiency and rate variances |
| 8-31-XX |
102,000 |
|||
| Variable Overhead Efficiency Variance |
23,000 |
|||
| Variable OH Spending Variance |
20,000 |
|||
|
105,000 |
||||
| To increase work in process for the standard variable overhead, and record the related efficiency and spending variances |
| 8-31-XX |
61,200 |
|||
| Fixed Overhead Volume Variance |
10,800 |
|||
| Fixed OH Spending Variance |
2,000 |
|||
|
70,000 |
||||
| To increase work in process for the standard fixed overhead, and record the related volume and spending variances |