Grandma's Attic Company produces soft pillows made from goose down. The company uses a standard cost system and has set the following standards for materials and labor for each pillow:
Feathers from 5 large white geese (5 geese @ $5) ................................ $25
Fabric to make pillow cases (3 yards @ $2) ........................................... 6
Direct labor (5 hours @ $8) .................................................................. 40
Total prime cost .................................................................................. $71
During the month, the company produced 1,000 goose down pillows. Actual geese purchased were 5,100, at $4 per goose. Actual fabric purchased was 2,900 yards at $2.10 per yard. There were no beginning or ending inventories of geese or fabric. Actual direct labor was 5,200 hours at $7.75 per hour.
A. Determine the total materials price variance and whether it is favorable or unfavorable.
B. Determine the total materials usage variance and whether it is favorable or unfavorable.
C. Determine the labor rate variance and whether it is favorable or unfavorable.
D. Determine the labor efficiency variance and whether it is favorable or unfavorable.
E. Make all necessary journal entries to record the purchase of materials, the issuance and usage of materials, and the direct labor variances.
F. Provide the closing entries.