Reference no: EM132497246

Question - Jim Graham Integrated Services uses a standard cost system, and calculates and records variances related to direct materials and direct labor. The following information was available for March:

Purchases of raw materials - actual cost $ 100,000

Purchases of raw materials - standard cost 105,000

All of the purchased raw material was transferred to work in process. The materials quantity variance was unfavorable by $10,000.

Direct labor - actual cost $ 135,000

Direct labor - standard cost for output 132,500

The labor efficiency variance was favorable by $7,500.

(a) Prepare the journal entry that is needed to record the purchase of raw materials at standard price, and the related variance.

(b) Prepare the journal entry that is needed to record the transfer of raw materials to production at standard usage rates, and the related unfavorable quantity variance.

(c) Prepare the journal entry that is needed to record the increase in work in process for the standard direct labor costs, and record the related rate and efficiency variances.