Vista Company installed a standard cost system on January 1. Selected transactions for the month of January are as follows. 1. Purchased 18,400 units of raw materials on account at a cost of $3.90 per unit. Standard cost was $3.80 per unit.
2. Issued 18,400 units of raw materials for jobs that required 18,100 standard units of raw materials.
3. Incurred 16,000 actual hours of direct labor at an actual rate of $4.10 per hour. The standard rate is $4.60 per hour. (Credit Factory Wages Payable).
4. Performed 16,000 hours of direct labor on jobs when standard hours were 16,190.
5. Applied overhead to jobs at the rate of 100% of direct labor cost for standard hours allowed.
Journalize the January transactions.

1. Dr Raw Materials Inventory$69,920

Dr Materials Price Variance$1,840

Cr Accounts Payable $71,760

2. Dr Work in Process Inventory$68,780

Dr Materials Quantity Variance$1,140

Cr Raw Materials Inventory $69,920

3. Dr Factory Labor$73,600

Cr Labor Price Variance $8,000

Cr Factory Wages Payable $65,600

4. Dr Work in Process Inventory$74,474

Cr Labor Quantity Variance $874

Cr Factory Labor $73,600

5. Dr Work in Process Inventory$143,254

Cr Manufacturing Overhead $143,254

Explanation:

Preparation of the anuary transactions

1. Dr Raw Materials Inventory$69,920

(18,400*$3.80)

Dr Materials Price Variance$1,840 [18,400 x ($3.90 - $3.80)]

Cr Accounts Payable $71,760

($69,920+$1,840)

2. Dr Work in Process Inventory$68,780

(18,100*$3.80)

Dr Materials Quantity Variance$1,140 [$3.80 x (18,400 - 18,100)]

Cr Raw Materials Inventory $69,920

(18,400*$3.80)

3. Dr Factory Labor$73,600

($16,000*$4.60)

Cr Labor Price Variance $8,000

[16,000 x ($4.10 - $4.60)]

Cr Factory Wages Payable $65,600

(16,000*$4.10)

4. Dr Work in Process Inventory$74,474

(16,190*$4.60)

Cr Labor Quantity Variance $874[$4.60 x (16,000 - 16,190)]

Cr Factory Labor $73,600

($8,000+$65,600)

5. Dr Work in Process Inventory$143,254

($68,780+$74,474)

Cr Manufacturing Overhead $143,254