EX 23-20 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.

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.

Answer:


a. Materials
1 
1
18,825  
Direct Materials Price Variance
2 
8
,575  
Accounts Payable
3 

 127,400 
Work in Process
1 
97,000  

Direct Materials Quantity Variance
2M
aterials
3 

200 × 10 units × $48.50 
(2,000 units – 1,900 units) × $48.50 
1,900 × $48.50