Actual cost and production information for July 2024 follows: (Click the icon to view actual cost and production information.) Preston manufactures coffee mugs that it sells to other companies for customizing with their own logos. Preston prepares flexible budgets and uses a standard cost system control manufacturing costs. The standard unit cost of a coffee mug is based on static budget volume of 59,800 coffee mugs per month: (Click the icon to view the cost data.) Read the requirements. Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance 800F Direct materials cost variance = (AC-SC) AQ (AC-SC) AQ Direct labor cost variance = 3960 U Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance = 625 F Direct materials efficiency variance Direct labor efficiency variance (AQ - SQ)SC (AQ - SQ) - SC = 2604 Uv Requirement 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin by journalizing the purchase of direct materials, including the related variance. (Prepare a single compound journal entry) Date Debit Credit Accounts and Explanation Raw Materials Inventory Jul. 2500 Direct Materials Cost Variance 800 Accounts Payable 1700 Purchased direct materials. Now, journalize the usage of direct materials, including the related variance. (Prepare a single compound journal entry.) Date Debit Credit Jul. 3125 Accounts and Explanation Work-in-Process Inventory Direct Materials Efficiency Variance Raw Materials Inventory 625 2500 Now, journalize the usage of direct materials, including the related variance. (Prepare a single compound journal entry.) Date Debit Credit Jul. 3125 Accounts and Explanation Work-in-Process Inventory Direct Materials Efficiency Variance Raw Materials Inventory 625 2500 Used direct materials. Journalize the incurrance and assignment of direct labor costs, including the related variances. (Prepare a single compound journal entry.) Date Accounts and Explanation Debit Credit Jul. Work-in-Process Inventory 26250 3960 2604 Direct Labor Cost Variance Direct Labor Efficiency Variance Wages Payable Direct labor costs incurred. 25740 Requirement 3. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U). (Round any interim calculations to four decimal places, X.XXXX, and your final answers to the nearest whole dolllar. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity; VOH = variable overhead.) = Formula Variance VOH cost variance (AC-SC) AQ VOH efficiency variance (AQ - SQ) SC Now compute the fixed overhead cost and volume variances. Select the required formulas, compute the fixed overhead cost and volume variances, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Variance FOH cost variance = Formula Actual FOH - Budgeted FOH Bugeted FOH - Allocated FOH FOH volume variance Requirement 4. Journalize the actual manufacturing overhead and the allocated manufacturing overhead. Journalize the movement of all production costs from Work-in-Process Inventory. Journalize the adjusting of the Manufacturing Overhead account. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin by journalizing the entry to show the actual manufacturing overhead costs incurred. Date Debit Credit Jul. Accounts and Explanation Manufacturing Overhead Various Accounts Manufacturing overhead costs incurred. Journalize the applied manufacturing overhead. Date Accounts and Explanation Debit Credit Jul. Work-in-Process Inventory Manufacturing Overhead Manufacturing overhead costs allocated. Journalize the movement of all production from Work-in-Process Inventory. Date Accounts and Explanation Debit Credit Jul. Finished Goods Inventory Work-in-Process Inventory a. There were no beginning or ending inventory balances. All expenditures were on account. b. Actual production and sales were 62,500 coffee mugs. c. Actual direct materials usage was 10,000 lbs. at an actual cost of $0.17 per lb. d. Actual direct labor usage was 198,000 minutes at a total cost of $31,680. e. Actual overhead cost was $4,950 variable and $35,550 fixed. f. Selling and administrative costs were $130,000. $ 0.05 0.42 Direct Materials (0.2 lbs @ $0.25 per lb) Direct Labor (3 minutes @ $0.14 per minute) Manufacturing Overhead: Variable (3 minutes @ $0.04 per minute) $ 0.12 0.39 0.51 Fixed (3 minutes @ $0.13 per minute) $ 0.98 Total Cost per Coffee Mug