Chapter 8, Problem 8P

Journal entries for materials and labor variances

Carlo Lee Corp. has established the following standard cost per

Although 10,000 units were budgeted, only 8,800 units were produced.

The purchasing department bought 55,000 lb of materials at a cost of $123,750. Actual pounds of materials used were 54,305. Direct labor cost was $186,550 for 18,200 hours worked.

Required:

1. 1. Make journal entries to record the materials transactions, assuming that the materials price variance was recorded at the time of purchase.
2. 2. Make journal entries to record the labor variances.