24 Question 4 -Ch- (O pany makes a product called goop for home use. The standard cost card for one case (10 containers) of goop is: Raw materials Containers Direct labour Variable overhead Fixed overhead (2 litres @ $4) (10 $0.10) (0.5 hour $8) (0.5 hours @$2) (0.5 hours @S4) s 8.00 1.00 4.00 1.00 2.00 $16,00 Overhead standards are computed as follows: Y-$16,000+ $2 x direct labour-hours. Inventory, production, and sales data for the period are as follows: Opening Inventorles Issued to Produetion Ending Inventories 7,400 litres Raw materials Finished goods Containers Work in process 1,000 litres 400 cases 13,600 litres 200 cases 62,000 Production Sales Direct labour used Actual variable overhead cost Actual fixed overhead cost Selling and administration Raw materials actual cost Container actual cost 6,000 cases 6,200 cases @24/cases 2,800 hours $8.10hour $6,500 $18,000 $38,000 ($30,000 fixed) $3.80 per litre $0.09 Required a. Calculate the direct cost variances (price and efficiency variances for raw materials, containers, and 6 6 6 direct labour). Calculate the variable overhead variances. Calculate the fixed overhead varlances Prepare journal entries to account for the following, assuming that standard costing is used: ) Purchase of containers, including the price variance. b. c. d. i) Application of raw materials to work in process, including the efficiency variance. ii) Incurrence of variable overhead, application of variable overhead to work in process, and the isolation of the variable overhend variances. Assume that the actual cost is credited to accounts payable Completion of production and transfer to finished goods inventory at standard cost. iv) 24 Question 4 -Ch- (O pany makes a product called goop for home use. The standard cost card for one case (10 containers) of goop is: Raw materials Containers Direct labour Variable overhead Fixed overhead (2 litres @ $4) (10 $0.10) (0.5 hour $8) (0.5 hours @$2) (0.5 hours @S4) s 8.00 1.00 4.00 1.00 2.00 $16,00 Overhead standards are computed as follows: Y-$16,000+ $2 x direct labour-hours. Inventory, production, and sales data for the period are as follows: Opening Inventorles Issued to Produetion Ending Inventories 7,400 litres Raw materials Finished goods Containers Work in process 1,000 litres 400 cases 13,600 litres 200 cases 62,000 Production Sales Direct labour used Actual variable overhead cost Actual fixed overhead cost Selling and administration Raw materials actual cost Container actual cost 6,000 cases 6,200 cases @24/cases 2,800 hours $8.10hour $6,500 $18,000 $38,000 ($30,000 fixed) $3.80 per litre $0.09 Required a. Calculate the direct cost variances (price and efficiency variances for raw materials, containers, and 6 6 6 direct labour). Calculate the variable overhead variances. Calculate the fixed overhead varlances Prepare journal entries to account for the following, assuming that standard costing is used: ) Purchase of containers, including the price variance. b. c. d. i) Application of raw materials to work in process, including the efficiency variance. ii) Incurrence of variable overhead, application of variable overhead to work in process, and the isolation of the variable overhend variances. Assume that the actual cost is credited to accounts payable Completion of production and transfer to finished goods inventory at standard cost. iv)