Hart Company made 3,300 bookshelves using 26,000 board feet of wood costing $322,400. The company's direct materials standards for one bookshelf are 9 board feet of wood at $12.30 per board foot.

Hart Company made 3,300 bookshelves using 26,000 board feet of wood costing $322,400. The company's direct materials standards for one bookshelf are 9 board feet of wood at $12.30 per board foot.

Hart Company records standard costs in its accounts and its materials variances in separate accounts when it assigns materials costs to the Work in Process Inventory account.
 
(1) Prepare the journal entry that both charges the direct materials costs to the Work in Process Inventory account and records the materials variances in their proper accounts.

(2) Assume that Hart's materials variances are the only variances accumulated in the accounting period and that they are immaterial. Prepare the adjusting journal entry to close the variance accounts at period-end.

Hart Company made 3,300 bookshelves using 26,000 board feet of wood costing $322,400. The company's direct materials standards for one bookshelf are 9 board feet of wood at $12.30 per board foot.

Hart Company made 3,300 bookshelves using 26,000 board feet of wood costing $322,400. The company's direct materials standards for one bookshelf are 9 board feet of wood at $12.30 per board foot.

Explanation

Preliminary computations
Actual quantity:	26,000 bd. ft. (given)
Standard quantity:	3,300 units × 9 bd. ft./unit = 29,700 bd. ft.
Actual price:	$322,400 / 26,000 bd. ft. = $12.40 / bd. ft.
Standard price:	$12.30 / bd. ft. (given)

Direct material cost variances
 

Actual units at actual cost [26,000 bd. ft. @ $12.40]	$	322,400
Standard units and standard cost [29,700 bd. ft. @ $12.30]		365,310
Direct material cost variance	$	42,910	F

Price and Quantity Variances
Actual Cost AQ × AP			AQ × SP			Standard Cost SQ × SP
26,000 × $12.40			26,000 × $12.30			29,700 × $12.30
bd. ft. per bd. ft.			bd. ft. per bd. ft.			bd. ft. per bd. ft.
$322,400			$319,800			$365,310
	$2,600 U			$45,510 F
	(Price variance)			(Quantity variance)
		$42,910 F (Total materials variance)