Kincaid Company’s standard cost accounting system recorded this information from its June operations.
|
Standard direct materials cost |
$220,500 |
|
Direct materials quantity variance (favorable) |
20,250 |
|
Direct materials price variance (favorable) |
14,500 |
|
Actual direct labor cost |
335,000 |
|
Direct labor efficiency variance (favorable) |
26,700 |
|
Direct labor rate variance (unfavorable) |
3,500 |
|
Actual overhead cost |
359,000 |
|
Volume variance (unfavorable) |
1,650 |
|
Controllable variance (unfavorable) |
32,500 |
Required
1. Prepare journal entries dated June 30 to record the company’s costs and variances for the month. (Do not prepare the journal entry to close the variances.)
2. Identify the areas that would attract the attention of a manager who uses management by exception. Describe what action(s) the manager should consider.