A company uses a standard cost system. One of the mostpopular products is a cent

Question

A company uses a standard cost system. One of the mostpopular products is a center that houses electronic units. The per-unit standard costs of the center, assuming a "normal"volume of 1,000 units per month asre as follows;
direct materials, 100 board-feet of wood at $1.30 perfoot................ $130.00
direct labor, 5 hours at $8.00 perhour..............................................     40.00
manufacturing overhead (applied at $22 perunit)..............................
      fixed ($15,000/1,000units of normal production0...........$15.00
     variable...........................................................................   7.00       22.00
         totalstandard unitcost................................................               $ 192.00
During July, 800 centers were scheduled and produced at thefollowing unit costs:
direct materials, 100 fee at $1.20 perfoot..................................... $132.00
direct labor, 5 1/2 hours at $7.80 perhour....................................    42.90
manufacturing overhead, $18,480 /800units.................................      23.10
    total actual unitcost.................................................................. $198.00 b. Prepare journal entries to assign manufacturing cost to theWork in Process Inventory account and to record cost variances forJuly. Use seperate entries entries for (1) direct materials,(2) direct labor and (3) overhead costs. A company uses a standard cost system. One of the mostpopular products is a center that houses electronic units. The per-unit standard costs of the center, assuming a "normal"volume of 1,000 units per month asre as follows; direct materials, 100 board-feet of wood at $1.30 perfoot................ $130.00 direct labor, 5 hours at $8.00 perhour..............................................     40.00 manufacturing overhead (applied at $22 perunit)..............................       fixed ($15,000/1,000units of normal production0...........$15.00      variable...........................................................................   7.00       22.00          totalstandard unitcost................................................               $ 192.00 During July, 800 centers were scheduled and produced at thefollowing unit costs: direct materials, 100 fee at $1.20 perfoot..................................... $132.00 direct labor, 5 1/2 hours at $7.80 perhour....................................    42.90 manufacturing overhead, $18,480 /800units.................................      23.10
    total actual unitcost.................................................................. $198.00 b. Prepare journal entries to assign manufacturing cost to theWork in Process Inventory account and to record cost variances forJuly. Use seperate entries entries for (1) direct materials,(2) direct labor and (3) overhead costs.     total actual unitcost.................................................................. $198.00 b. Prepare journal entries to assign manufacturing cost to theWork in Process Inventory account and to record cost variances forJuly. Use seperate entries entries for (1) direct materials,(2) direct labor and (3) overhead costs.

Explanation / Answer

   ===================    MPV      =      (Actual Quantity x Standard Price)   -   (Actual Quantity x Actual Price)                  =      (110 feet x 800 units x $1.30)   -   (110 feet x 800 units x 1.20)                  =      $114,400   -   $105,600      =      $8,800F 2. Materials Quantity Variance     ======================    MQV      =      (Actual Quantity   -   Standard Quantity) x Standard price per unit                   =      (110 feet x 800 units  -   100 feet x 800 units) x $1.30                   =      (88,000 feets   -   80,000 feets)   x   $1.30                     =      $10,400U
3. Labor rate variance
3. Labor rate variance     ===============       LRV      =   (Actual Rate   -   Standard Rate)   x   Actual hours of production                    =   (5.50 x $7.80   -   5.50 x $8.00)   x   800 units                    =   ($42.90   -   $44.00)   x 800 units                                 =            $880F   4. Labor Efficiency Variance     ==================== difference between the amount of labor time that should have been used and the labor that was actually used, multiplied by the standard rate.       =   (5.00 hrs x 800 units -   5.50 x 800 units) x $8.00 per unit (Standard labor rate)       =   (4,000 hrs   -   4,400 units)   x   $8.00      =   $3200U 5. Overhead spending variance     ======================             Overhead spending variance   =   Actual overhead cost   -   (Standard Rate x Actual Output)                                                            =   $18,480    -   ($22.00 x 800units)                                                            =   $18,480   -   $17,600                                          =      $880U 6. Volume variance      =============             Overhead Volume variance   =   Actual Outputt   -   Budgeted Overhead Cost                                                         =   (1000 units - 800 units) x $22                                                         =   200 x $22                                          =      $4,400F 5. Overhead spending variance     ======================             Overhead spending variance   =   Actual overhead cost   -   (Standard Rate x Actual Output)                                                            =   $18,480    -   ($22.00 x 800units)                                                            =   $18,480   -   $17,600                                          =      $880U 6. Volume variance      =============             Overhead Volume variance   =   Actual Outputt   -   Budgeted Overhead Cost                                                         =   (1000 units - 800 units) x $22                                                         =   200 x $22                                          =      $4,400F 5. Overhead spending variance     ======================             Overhead spending variance   =   Actual overhead cost   -   (Standard Rate x Actual Output)                                                            =   $18,480    -   ($22.00 x 800units)                                                            =   $18,480   -   $17,600                                          =      $880U 6. Volume variance      =============             Overhead Volume variance   =   Actual Outputt   -   Budgeted Overhead Cost      =============             Overhead Volume variance   =   Actual Outputt   -   Budgeted Overhead Cost                                                         =   (1000 units - 800 units) x $22                                                         =   200 x $22                                          =      $4,400F                                                         =   (1000 units - 800 units) x $22                                                         =   200 x $22                                          =      $4,400F b. Prepare journal entries to assign manufacturing cost to the Work in Process Inventory account and to record cost variances for July. Use seperate entries entries for (1) direct materials, (2) direct labor and (3) overhead co b. Prepare journal entries to assign manufacturing cost to the Work in Process Inventory account and to record cost variances for July. Use seperate entries entries for (1) direct materials, (2) direct labor and (3) overhead co

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