Top-Shelf Classics uses standard costs in a process cost system. At the end of the current month, the following information is prepared by the company’s cost accountant.

The total standard cost per unit of finished product is $9. During the current month, 8,000 units were completed and transferred to the finished goods inventory and 7,500 units were sold. The inventory of work in process at the end of the month consists of 1,200 units that are 80 percent complete. There was no inventory in process at the beginning of the month.

Instructions
a. Prepare journal entries to record all variances and the costs incurred (at standard) in the Work in Process account as separate compound entries for (1) direct materials, (2) direct labor, and (3) manufacturing overhead.
b. Prepare journal entries to record (1) the transfer of units finished to the Finished Goods Inventory account and (2) the Cost of Goods Sold (at standard) for the month.
c. Assuming that the company operated at 60 percent of its normal capacity during the current month, what is the amount of the budgeted fixed manufacturing overhead per month?

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Actual costs incurred. Standard costs .. Materials price variance (favorable) Materials quantity variance (unfavorable) Labor rate variance (favorable) .... Labor efficiency variance (unfavorable) Overhead spending variance (unfavorable). Overhead volume variance (unfavorable) Direct Direct Manufacturing Materials Labor Overhead $64,800 $57,600 $72,000 60,000 56,400 67,680 1,200 6,000 3,600 4,800 700 3,620