Response to the following problem:
Kinkel Corporation makes a product with the following standard costs for direct material and direct labor:
Direct material: 1.50 meters at $5.40 per meter . . . . . . . $8.10
Direct labor: 0.25 hours at $14.00 per hour . . . . . . . . . . . $3.50
During the most recent month, 8,000 units were produced. The costs associated with the month's production of this product were as follows:
Material purchased: 15,000 meters at $5.60 per meter . . . . . . . $84,000
Material used in production: 11,900 meters . . . . . . . . . . . . . . . . -
Direct labor: 1,950 hours at $14.20 per hour . . . . . . . . . . . . . . . $27,690
The standard cost variances for direct material and direct labor are:
Materials price variance: 15,000 meters at $0.20 per meter U . . . . . . . $3,000 U
Materials quantity variance: 100 meters at $5.40 per meter F . . . . . . . . $540 F
Labor rate variance: 1,950 hours at $0.20 per hour U . . . . . . . . . . . . . . $390 U
Labor efficiency variance: 50 hours at $14.00 per hour F . . . . . . . . . . . $700 F
Required:
1. Prepare the journal entry to record the purchase of materials on account for the month.
2. Prepare the journal entry to record the use of materials for the month.
3. Prepare the journal entry to record the incurrence of direct labor cost for the month.