Ehrlich Inc. makes a product with the following standard costs for directmaterial and direct labor:Quantity/HoursPrice /RatePer UnitDirect Material6.00 lbs$ 3.80Direct Labor1.5 hrs$ 16.00During the most recent month, 6,300 units were produced. The costs associatedwith the month's production of this product were as follows:Quantity/HoursPrice /RateMaterials purchased42,000 lbs$3.00/per lbs.Materials used in production32,000 lbsDirect labor9,950 hrs$14.50/per hr. Required:Part 1 - Calculate the standard cost expected to make 6,500 units of productPart 2 - Compute applicable Variances...1. Material Price Variance2. Material Quantity Variance3. Labor Rate Variance4. Labor Efficiency Variance5. Labor Spending VariancePart 3 - Prepare applicable Journal Entries to Record...1. the purchase of materials on account for the month.2. the use of materials for the month.3. the direct labor cost for the month.4. the closing of variance accounts at the end of the month

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Description: Ehrlich Inc. makes a product with the following standard costs for directmaterial and direct labor:Quantity/HoursPrice /RatePer UnitDirect Material6.00 lbs$ 3.80Direct Labor1.5 hrs$ 16.00During the most recent month, 6,300 units were produced. The c

Variance is the difference between the standards of performance and the actual levels of…

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Accounting

Ehrlich Inc. makes a product with the following standard costs for direct material and direct labor: Quantity/Hours Price /Rate Per Unit Direct Material 6.00 lbs $ 3.80 Direct Labor 1.5 hrs $ 16.00

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PA: The following product costs are available for Arrez Company on the production of DVD cases: direct...

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