Question

Listor Company made 3,800 bookshelves using 23,320 board feet ofwood costing $290,000. The company's direct materials standards forone bookshelf are 8 board feet of wood at $12 per board foot.Listor Company records standard costs in its accounts and itsmaterial variances in separate accounts when it assigns materialscosts to the goods in process inventory account.

A) Show the journal entry that both charges the direct materialscosts to the goods in process inventory account and records thematerials variances in their proper accounts.
B)Assume that Listor's material variances are the only variacesaccumulated in the accounting period and that they are immaterial.Prepare the adjusting journal entry to close the variance accountsat period end.
C)Identify the variance that should be investigated according tothe management by exception concepts.