1.WHAT ARE THE CAUSES OF LABOR TIME EFFICIENCY VARIANCE. EXPLAIN AT LEAST 2 CAUSES AND HOW IT AFFECTS THE OPERATING PERFORMANCE OF THE BUSINESS

2. ARE THE CAUSE OF LABOR RATE. EXPLAIN AT LEAST 2 CAUSES AND HOW IT AFFECTS THE OPERATING PERFORMANCE OF THE BUSINESS

PROBLEM 1

The Mayhem Company uses a job-order costing system. The following data relate to October, the first month of the company's fiscal year

A.Raw materials purchased on account, 210,000

B.Raw materials issued to production, 190,000 (178,000 direct materials and 12,000 indirect materials)

C.Direct Labor costg incurred, 90,000; and indirect labor cost incurred, 110,000

D.Depreciation recorded on factory equipment, 40,000

E.The Company applies Manufacturing overhead cost incurred during October, 70,000 (credit accounts Payable)

F.The company applies manufacturing overhead cost to production on the basis of 8 per machine hour. There were 30,000 machine hours recorded for October.

G.Production Orders costing520,000 according to their job cost sheets were completed during October and transferred to Finish Goods.

H.Production orders that had cost 480,000 to complet according to their job cost sheets were shipped to customers during the month. These goods were sold at 25% above cost. The goods were sold on account.

REQUIRED

1.Prepare journal entries to record the information given above

2.Prepare T-accounts for Manufacturing Overhead and Work in process. Post the relevant information above to each account. Compute the ending balance in ech account. Assuming that Work in Process has a beginning of 42,000