E7-I throughE7-5 use the following data:

The standard operating capacity of the Techno 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 E7-I throughE7-5 requires the following:'

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

b. Analyze the variances and 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, indicate the types of variances, and state whether each variance is favorable or unfavorable.

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