Kinkel Corporation makes a product with the following standard costs for direct material and direct labour:
Direct material: 1.50 metres at $5.40 per metre .... 8.10
Direct labour: 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 metres at $5.60 ....$84,000
Material used in production: 11,900 metres.... ---
Direct labour: 1,950 hours at $14.20 per hour.... $27,690
The standard cost variances for direct material and direct labour are:
Materials price variance: 15,000 metres at $0.20 per metre U....$3,000 U
Materials quantity variance: 100 metres at $5.40 per metre F....$540 F
Labour rate variance: 1,950 hours at $0.20 per hour U....$390U
Labour efficiency variance: 50 hours at $14.00 per hour F....$700 F
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 labour cost for the month.