(Appendix used in Part b) Variable Cost Variances
Information on Thurmster Corporation’s direct materials costs follows:
|
Actual quantities of direct materials used |
7,500 |
|
Actual costs of direct materials used |
$98,550 |
|
Standard price per unit of direct materials |
$12.60 |
|
Flexible budget for direct materials |
$89,775 |
Thurmster Corporation has no materials inventories.
Required
a. Prepare a short report for management showing Thurmster Corporation’s direct materials price and efficiency variances.
b. (Appendix) Prepare the journal entries to record the purchase and use of the direct materials using standard costing.