The Wooly Sock Company manufactures socks for men. The socks are made so that one size fits all. Since the company’s start 3 years ago, it has been using a standard cost system. Below are the standard costs for 50 pairs: mlp5

Required:
a Compute the direct materials variances and the direct labor variances for September.
b Prepare journal entries to record direct materials and direct labor.

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Direct materials (25 yards of synthetic fabric at $.56 a yard). Direct labor (1.5 hours at $5 per hour) Factory overhead (1.5 hours at $8 per hour).. Total standard costs $14.00 7.50 12.00 $33.50 Direct materials requisitioned from the storeroom are assumed to be from the most recent purchases (lifo method). Below is an analysis of September activity in the Direct Materials Inven- tory account: Units (yards) Unit cost (per yard) Beginning balance 9/1 Purchases: 9/5 9/10 Requisitions: 9/12 2,500 4,000 5,000 8,600 $.50 .54 .58 Inventory is on a perpetual system. Price variances are journalized when the units are used in production. During September, factory employees worked 430 hours at a rate of $5.25 per hour. Production for the month equaled 15,000 pairs of socks.