Assignment
Lopez Company uses a standard cost accounting system. Some of the ledger accounts have been destroyed in a fire. The controller asks your help in reconstructing some missing entries and balances.
Answer the following questions.
(a) Materials Price Variance shows a $1,500 unfavorable balance. Accounts Payable shows $126,000 of raw materials purchases. What was the amount debited to Raw Materials Inventory for raw materials purchased?
(b) Materials Quantity Variance shows a $2,500 favorable balance. Raw Materials Inventory shows a zero balance. What was the amount debited to Work in Process Inventory for direct materials used?
(c) Labor Price Variance shows a $1,000 favorable balance. Factory Labor shows a debit of $138,000 for wages incurred. What was the amount credited to Factory Wages Payable?
(d) Factory Labor shows a credit of $138,000 for direct labor used. Labor Quantity Variance shows a $500 favorable balance. What was the amount debited to Work in Process for direct labor used?
(e) Overhead applied to Work in Process totaled $163,000. If the total overhead variance was $1,000 favorable, what was the amount of overhead costs debited to Manufacturing Overhead?