Recording Standards in Accounts Cioffi Manufacturing Company incorporates standards in its accounts and identifies variances at the time the manufacturing costs are incurred. Journalize the entries to record the following transactions: a. Purchased 2,450 units of copper tubing on account at $52.00 per unit. The standard price is $48.50 per unit. If an amount box does not require an entry, leave it blank. a. Materials ? ? Direct Materials Price Variance ? ? Accounts Payable ? ? Feedback Debit (unfavorable) or credit (favorable) the direct materials price variance. Debit (unfavorable) or credit (favorable) the direct materials quantity variance. b. Used 1,900 units of copper tubing in the process of manufacturing 200 air conditioners. Ten units of copper tubing are required, at standard, to produce one air conditioner. If an amount box does not require an entry, leave it blank. b. Work in Process ? ? Direct Materials Quantity Variance ? ? Materials ? ?
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Recording Standards in Accounts
Cioffi Manufacturing Company incorporates standards in its accounts and identifies variances at the time the
a. Purchased 2,450 units of copper tubing on account at $52.00 per unit. The standard price is $48.50 per unit. If an amount box does not require an entry, leave it blank.
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Materials | ? | ? |
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Direct Materials Price Variance | ? | ? | |
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Accounts Payable | ? | ? |
Debit (unfavorable) or credit (favorable) the direct materials price variance.
Debit (unfavorable) or credit (favorable) the direct materials quantity variance.
b. Used 1,900 units of copper tubing in the process of manufacturing 200 air conditioners. Ten units of copper tubing are required, at standard, to produce one air conditioner. If an amount box does not require an entry, leave it blank.
| b. |
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Work in Process | ? | ? |
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Direct Materials Quantity Variance | ? | ? | |
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Materials | ? | ? |
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