Without The Journal Entries Standard Costs Decomposition of

Without The Journal Entries

Standard Costs, Decomposition of Budget Variances, Direct Materials and Direct Labor 9-12 L02, L03 Corporation produces leather sandals. lhe company uses a standard costing system and has set the following standards for direct materials and direct labor (for one pair of sandals): Leather (3 strips S5) Direct labor (2 hrs. S6) $15 12 $27 Total prime cost During the year, Pato produced 4,000 pairs of sandals. The actual leather purchased was 12,400 strip leather. Actual direct labor was 8,400 hours at S6.25 per hour s at $4.98 per strip. There were no beginn ing or ending inventories o Required: I. Compute the costs of leather and direct labor that should have been incurred for the production of 4,000 pairs of sandals. 2. Compute the total budget variances for direct materials and direct labor 3. Break down the total budget variance for direct materials into a price variance and a usage variance. Prepare the journal entries associated with these variances

Solution

Answer for 9-12

Second question has missing information

Requirement 1
Standard Cost of Production of 4000 pairs of sandal
Particulars	Calcuation	Amount
Direct Material -Leather	4,000 Pairs X 3 Strips X $5	60,000
Direct Labor	4,000 Pairs X 2 Hrs X $6	48,000
Total Cost		1,08,000
Actual Cost of Production of 4000 pairs of sandal
Particulars	Calcuation	Amount
Direct Material -Leather	12400 Strips X $4.98	61,752
Direct Labor	8,400 Hrs X $6.25	52,500
Total Cost		1,14,252
Requirement 2
Total Budget variance for direct Material & Labor
Particulars	Standard cost	Actual Cost	Variance
Direct Material -Leather	60,000	61,752	1,752	Unfavourable
Direct Labor	48,000	52,500	4,500	Unfavourable