Variance analysis; journal entries; other analyses for multiple departments LO_3,4 Cost and production data for Beverage Products Company are presented as follows.

LO_5,7

Required:
1. Calculate net variances for materials, labor, and factory overhead.
2. Calculate specific materials and labor variances by department, using the diagram format in Figure 7- 1.
3. Make all journal entries to record production costs in Work in Process and Finished Goods.
4. Prove balances of Work in Process for both departments.
5. Prove that all costs have been accounted for. Note: Assume that materials, labor, and overhead are added evenly throughout the process.
6. Assume that 4,000 units were sold at $40 each.

a. Calculate the gross margin based on standard cost. (Hint: Recall that Gross margin = Sales - Cost of Goods Sold.)

b. Calculate the gross margin based on actual cost.

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Standard Cost Summary Mixing Blending Total Materials: 4 lbs. @ $0.50 $ 2 I gal. @ $1.00 $ 1 $ 3 Labor: I hour @ $8.00. 8 I hour @ $10.00. 10 18 Factory overhead: Per unit.. 2 3 $11 $13 $24 Production Report Mixing Blending Beginning units in process.. None None Units finished and transferred. 6,000 5,000 Ending units in process 2,000 1,000 Stage of completion.. 1/2 1/2 Cost Data Mixing Blending Direct materials: 30,000 lbs. @ $0.52.. 5,500 gal. @ $0.95 Direct labor: $15,600 $ 5,225 54,400 6,800 hours @ $8.00. 5,600 hours @ $10.20 57,120 Factory overhead: Indirect materials.... $ 500 $1,000 Indirect labor Other.. 2,000 5,000 4,500 7,000 5,000 11,000 $77,000 $73,345