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Required:1. a. Calculate net variances for materials, labor, and factory overhead.b. Calculate specific materials and labor variances by department,using the diagram format in Figure 8-4.c. Comment on the possible causes for each of the variances that youcomputed.2. Make all journal entries to record production costs in Work in Processand Finished Goods.3. Determine the balance of ending Work in Process in each department.4. Assume that 4,000 units were sold at $40 each.a. Calculate the gross margin based on standard cost.b. Calculate the gross margin based on actual cost.c. Why does the gross margin at actual cost differ from the gross mar-gin at standard cost.5. As the plant controller, you present the variance report in Item 1 aboveto Paul Crooke, the plant manager. After reading it, Paul states: If wepresent this performance report to corporate with that large unfavorablelabor variance in Blending, nobody in the plant will receive a bonus.Those standard hours of 5,500 are way too tight for this production pro-cess. Fifty-eight hundred hours would be more reasonable, and thatwould result in a favorable labor efficiency variance that would morethan offset the unfavorable labor rate variance. Please redo the variancecalculations using 5,800 hours as the standard. You object, but Paulends the conversation with, That is an order.a. What standards of ethical professional practice would be violated ifyou adhered to Pauls order?b. How would you attempt to resolve this ethical conflict?

Binghamton Beverages Inc. Variance analysis; journal entries; other analyses for multiple departments Cost and production data for Binghamton Beverages Inc. are presented as follows: Standard Cost Summary Mixing Blending Total Materials: $ 2 4 lb @ $.50. 1 gal @ $1.00 Labor: $ 1 $ 3 1 hr @ $8.00.. 8 1 hr @ $10.00 10 18 Factory overhead: Per unit.. 1 2 3 $11 $13 $24 Production Report Mixing None Blending None 6,000 5,000 Beginning units in process.. Units finished and transferred Ending units in process Stage of completion... 2,000 1,000 1/2 1/2 Cost Data Mixing Blending Direct materials: 30,000 lb @ $.52. $15,600 $ 5,225 5,500 gal @ $.95 Direct labor: 54,400 57,120 6,800 hr @ $8.00. 5,600 hr @ $10.20.. Factory overhead: Indirect materials Indirect labor $ 500 $1,000 5,000 2,000 Other 4,500 7,000 5,000 11,000 $77,000 $73,345