Recording of material and its variances:

Method No.1:

1 Raw material Std. cost Debit

Material price variance Unfav Debit
Material price variance Fav Credit
Account payable Actual cost Credit

2 Work in process Std. cost Debit

Material quantity variance Unfav Debit
Material quantity variance Fav Credit
Raw material Actual cost Credit

Method No.2:

1 Raw material Actual cost Debit

Account payable Actual cost Credit

2 Work in process Std. cost Debit

Material price variance Unfav Debit
Material quantity variance Unfav Debit
Material quantity variance Fav Credit
Material price variance Fav Credit
Raw material Actual cost Credit

Recording of Labour and its variances:

Method No.1:

1 Payroll Actual cost Debit

Accured payrol Actual cost Credit
 2 Work in process Std. cost Debit
Labor rate variance unfav Debit
Labor hours variance unfav Debit
Labor rate variance Fav Credit
Labor hours variance Fav Credit
Payroll Actual cost Credit

Recording of Factory overhead and its variances:

Two Variance Method

1 Factory overhead control Actual cost Debit

Various credits Actual cost Credit

2 Work in process (Std. hours allowed x total FOH rate)

Factory overhead control (Std. hours allowed x total FOH rate)

3 FOH Controllable variance unfav Debit

FOH Volume variance unfav Debit
FOH Controllable variance Fav Credit
FOH Volume variance Fav Credit
Factory overhead control Credit

Note: The amount in FOH control account will be closed in entry no2 and 3 and at end there will
no amount in FOH control account

Three Variance Method

1 Factory overhead control Actual cost Debit

Various credits Actual cost Credit

2 Work in process (Std. hours allowed x total FOH rate)

FOH Efficiency variance unfav
FOH Efficiency variance fav
Factory overhead control (Actual hours x total FOH rate)

3 FOH Spending variance unfav Debit

 FOH Idle capacity variance unfav Debit
FOH Spending variance fav Credit
FOH Idle capacity variance fav Credit
Factory overhead control (Bal. figure) Credit

Note: The amount in FOH control account will be closed in entry no2 and 3 and at end there will
no amount in FOH control account

Four Variance Method

1 Factory overhead control Actual cost Debit

Various credits Actual cost Credit

2 Work in process (Std. hours allowed x total FOH rate)

FOH Fixed efficiency variance unfav
FOH Variable efficiency variance unfav
FOH Fixed efficiency variance fav
FOH Variable variance fav
Factory overhead control (Actual hours x total FOH rate)

3 FOH Spending variance unfav Debit

FOH Idle capacity variance unfav Debit
FOH Spending variance fav Credit
FOH Idle capacity variance fav Credit
Factory overhead control (Bal. figure) Credit

Note: The amount in FOH control account will be closed in entry no2 and 3 and at end there will
no amount in FOH control account

Format of Entries of Material Mix and Material Yeild Variance

1 On purchase of material

Raw material Std. cost Debit

Material Price variance unfav Debit
Material Price variance Fav Credit
Account payable Actual cost Credit

2 To material charge to production

 Work in process Std. cost Debit
Material Mix variance unfav Debit
Material Mix variance Fav Credit
Raw material Actual cost Credit

3 To transfer material cost to finished goods

Finished Goods Std. cost Debit

Material Yeild Variance unfav Debit
Material Yeild variance Fav Credit
Work in process Actual cost Credit

Format of Entries of Labor Mix and Labor Yeild Variance

1 Set up Payroll account

Payroll Debit
Accured payrol Credit

2 To transfer payroll to WIP

Work in process Debit

Labor rate variance unfav Debit
Labor hour variance unfav Debit
Labor rate variance fav Credit
Labor hour variance fav Credit
Payroll Credit
Credit
3 To transfer labor cost to Finished goods

Finished Goods Debit

Labor yeild variance unfav Debit
Labor yeild variance fav Credit
Work in process Credit

Format of Entries of FOH 2 variance and FOH Yeild Variance

1 Factory overhead control Actual cost Debit
Various credits Actual cost Credit

2 Work in process (Std. hours allowed x total FOH rate)

Factory overhead control (Std. hours allowed x total FOH rate)

3 FOH Controllable variance unfav Debit

FOH Volume variance unfav Debit
FOH Controllable variance Fav Credit
FOH Volume variance Fav Credit
Factory overhead control Credit

4 To transfer to Finished Goods

Finished goods Debit

FOH yeild variance unfav Debit
FOH yeild variance Fav Credit
Work in process Credit
 Debit
Credit

nd 3 and at end there will be

Debit
Debit
Credit
Credit
nd 3 and at end there will be

Debit

Debit

Credit
Credit

nd 3 and at end there will be

Yeild Variance
ild Variance

Yeild Variance
Debit
Credit