Computing standard unit cost; variance analysis; journal entries All of the deviations listed in E8-1 and E8-2 took place, and 1,000 units were started and finished. (Note that the quantities used will affect the rate variances for both materials and labor.)

The standard operating capacity of Nogales Manufacturing Co. is 1,000 units. A detailed study of the manufacturing data relating to the production of one product revealed the following:
1. Two pounds of materials are needed to produce one unit.
2. Standard unit cost of materials is \(\$ 8\) per pound.

3. It takes one hour of labor to produce one unit.
4. Standard labor rate is \(\$ 10\) per hour.
5. Standard overhead for this volume is \(\$ 4,000\).

{Each case in E8-1 through E8-5 requires the following:}

a. Set up a standard cost summary showing the standard unit cost.

b. Analyze the variances for materials and labor.

c. Make journal entries to record the transfer to Work in Process of:

1. materials costs;

2. labor costs;

3. overhead costs.

When making these entries, include the variances.

d. Prepare the journal entry to record the transfer of costs to the finished goods account.