Material
Material price variance for Jan 15, 20XX.
The direct material price variance is a Favorable variance of 11,250
The direct material usage variance is a unfavorable variance of 45,000
The total material variance is given as a sum of the direct material usage variance and direct material price variance
Total material variance is 33,750 unfavorable.
Accounting entry for the price variance
The accounting entries are a debit of 405,000 to the raw material account, a credit of 11,250 to the material price variance account and a credit of 393,750 to the accounts payable account.
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Labor
Labor Rate Variance.
The direct labor rate variance is 10,500 favorable
Labor Efficiency Variance
Direct Labor Efficiency Variance is 20,000 unfavorable
Accounting entry for the labor rate and efficiency variances.
The accounting entries are: Debit work in progress account with 400,000; credit labor rate variance with 10,500 and labor efficiency variance with 20,000.
Overhead
Variable overhead rate variance.
The variable overhead variance is 10.000 unfavorable
Variable overhead efficiency variance.
Accounting entry for the overhead rate and efficiency variances.
The accounting record is given as a debit to the cost of goods sold with 10,000 and a credit to the variable manufacturing cost overhead with 10,000
