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Neuhaus 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: Standard Quantity or Hours 1.7 gallons 0.70 hours 0.70 hours. Inputs Direct materials Direct labor Fixed manufacturing overhead Total standard cost per unit During the year, the company completed the following transactions: a. Purchased 52,900 gallons of raw material at a price of $7.60 per gallon. b. Used 46,820 gallons of the raw material to produce 27,600 units of work in process. Raw Materials Cash 1/1 $ 1,160,000 $45,900 Standard Price or Rate $7.50 per gallon $21.50 per hour. $6.00 per hour Work in Process $0 Standard Cost 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. $ 12.75 15.05 4.20 $32.00 Labor FOH FOH Quantity Labor Rate Efficiency Budget Volume Variance Variance Variance Variance Variance $0 $0 $0 $0 $0 Materials Materials. Finished Price Goods PP&E (net) = Variance $ 67,200 $ 757,400 = $0 = = a. b. When the purchase of raw materials is recorded in transaction (a) above, which of the following entries will be made? Retained Earnings $ 2,030,500

Neuhaus 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: Standard Quantity or Hours 1.7 gallons 0.70 hours 0.70 hours. Inputs Direct materials Direct labor Fixed manufacturing overhead Total standard cost per unit During the year, the company completed the following transactions: a. Purchased 52,900 gallons of raw material at a price of $7.60 per gallon. b. Used 46,820 gallons of the raw material to produce 27,600 units of work in process. Raw Materials Cash 1/1 $ 1,160,000 $45,900 Standard Price or Rate $7.50 per gallon $21.50 per hour. $6.00 per hour Work in Process $0 Standard Cost 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. $ 12.75 15.05 4.20 $32.00 Labor FOH FOH Quantity Labor Rate Efficiency Budget Volume Variance Variance Variance Variance Variance $0 $0 $0 $0 $0 Materials Materials. Finished Price Goods PP&E (net) = Variance $ 67,200 $ 757,400 = $0 = = a. b. When the purchase of raw materials is recorded in transaction (a) above, which of the following entries will be made? Retained Earnings $ 2,030,500

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter5: Product And Service Costing: Job-order System
Section: Chapter Questions
Problem 24E: Geneva, Inc., makes two products, X and Y, that require allocation of indirect manufacturing costs....
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Neuhaus 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: Inputs Direct materials Direct labor Fixed manufacturing overhead Total standard cost per unit Standard Quantity or Hours 1.7 gallons 0.70 hours 0.70 hours During the year, the company completed the following transactions: a. Purchased 52,900 gallons of raw material at a price of $7.60 per gallon. b. Used 46,820 gallons of the raw material to produce 27,600 units of work in process. Raw Materials Cash 1/1 $ 1,160,000 $ 45,900 a. b. Standard Price or Rate $ 7.50 per gallon $21.50 per hour $6.00 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. Work in Finished Process Goods PP&E (net) = $0 $ 67,200 $ 757,400 = = Standard Cost = $ 12.75 15.05 4.20 $ 32.00 Materials Materials Price Variance $0 Labor FOH FOH Quantity Labor Rate Efficiency Budget Volume Variance Variance Variance Variance Variance $0 $0 $0 $0 $0 When the purchase of raw materials is recorded in transaction (a) above, which of the following entries will be made? Retained Earnings $ 2,030,500
Transcribed Image Text:Neuhaus 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: Inputs Direct materials Direct labor Fixed manufacturing overhead Total standard cost per unit Standard Quantity or Hours 1.7 gallons 0.70 hours 0.70 hours During the year, the company completed the following transactions: a. Purchased 52,900 gallons of raw material at a price of $7.60 per gallon. b. Used 46,820 gallons of the raw material to produce 27,600 units of work in process. Raw Materials Cash 1/1 $ 1,160,000 $ 45,900 a. b. Standard Price or Rate $ 7.50 per gallon $21.50 per hour $6.00 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. Work in Finished Process Goods PP&E (net) = $0 $ 67,200 $ 757,400 = = Standard Cost = $ 12.75 15.05 4.20 $ 32.00 Materials Materials Price Variance $0 Labor FOH FOH Quantity Labor Rate Efficiency Budget Volume Variance Variance Variance Variance Variance $0 $0 $0 $0 $0 When the purchase of raw materials is recorded in transaction (a) above, which of the following entries will be made? Retained Earnings $ 2,030,500
Multiple Choice O O $5,290 in the Materials Quantity Variance column $5,290 in the Materials Price Variance column ($5,290) in the Materials Quantity Variance column ($5,290) in the Materials Price Variance column
Transcribed Image Text:Multiple Choice O O $5,290 in the Materials Quantity Variance column $5,290 in the Materials Price Variance column ($5,290) in the Materials Quantity Variance column ($5,290) in the Materials Price Variance column
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