Howard Company Has Established the Following Standards

question 42

Essay

Howard Company has established the following standards:
Direct materials: 2.0 pounds at $4.10
Direct labor: 1.5 hours at $7 per hour
Additional information was extracted from the accounting records:
Actual production: 32,000 completed units
Direct materials purchased: 70,000 pounds at $3.82, or $267,400
Direct materials consumed: 65,000 pounds
Actual labor incurred: 51,000 hours at $6.30, or $321,300
Direct-labor rate variance: $35,700 favorable
Direct-labor efficiency variance: $21,000 unfavorable
Assume that the company computes variances at the earliest point in time.
Required:
A. What is the amount of Direct Material Purchase Price Variance?
B. Prepare the journal entry to record the usage of direct materials.
C. Prepare the journal entry to record the incurrence of direct labor costs.

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Definitions:

Licensed Massage Therapists

Professionals who have obtained the necessary certification and licensing to perform massage therapy on clients for health and wellness benefits.

DMV

The Department of Motor Vehicles, a state-level government agency that administers vehicle registration and driver licensing.

Enabling Statutes

Laws passed by legislatures that grant certain powers or establish specific governmental bodies or agencies.

Accounting Commission

An accounting commission typically refers to a regulatory body or group tasked with overseeing accounting practices and standards.