2)

Bowen Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. Its predetermined overhead rate includes $1,000,000 of fixed overhead in the numerator and 50,000 direct labor-hours in the denominator. The company purchased (with cash) and used 46,000 yards of raw materials at a cost of $11.20 per yard. Its direct laborers worked 20,700 hours and were paid a total of $291,400. The company started and completed 9,500 units of finished goods during the period. Bowen's standard cost card for its only product is as follows: Standard Cost (1) X (2) $74.80 (1) (2) Standard Standard Quantity Price Inputs or Hours or Rate Direct materials 4.4 yards $17.00 yard per Direct labor 3. 8 hours $14.00 hour Fixed manufacturing per overhead 3.8 hours $20.00 hour Total standard cost per unit abor 53.20 76.00 $204.00 Required: 1. When recording the raw material purchases: a. The Raw Materials inventory will increase (decrease) by how much? b. The Cash will increase (decrease) by how much? 2. When recording the raw materials used in production: a. The Raw Materials inventory will increase (decrease) by how much? b. The Work in Process inventory will increase (decrease) by how much? 3. When recording the direct labor costs added to production: a. The Work in Process inventory will increase (decrease) by how much? b. The Cash will increase (decrease) by how much? 4. When applying fixed manufacturing overhead to production, the Work in Process inventory will increase (decrease) by how much? 5. When transferring manufacturing costs from Work in Process to Finished Goods, the Finished Goods inventory will increase (decrease) by how much? 1a. The raw materials will 1b. The cash will 2a. The raw materials will 2b. The work in process will 3a. The work in process will 3b. The cash will 4. The work in process will 5 The finished goods will Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: 1995 199 Total budgeted fixed overhead cost for the year Actual fixed overhead cost for the year Budgeted direct labor-hours (denominator level of activity) Actual direct labor-hours Standard direct labor-hours allowed for the actual output $521, 100 59,000 60,000 57.999 Required: 1. Compute the fixed portion of the predetermined overhead rate for the year. (Round Fixed portion of the predetermined overhead rate to 2 decimal places.) 2. Compute the fixed overhead budget variance and volume variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input all amounts as positive values.) per DIH Fixed portion of the predetermined overhead rate 2. Budget variance Volume variance