Basic Variance Analysis, Revision of Standards, 9-16 Journal Entries LO 1 , l2, LO3, L04 Nosemer Company produces engine parts for large motors. The company uses a standard cost system for production costing and control. The standard cost sheet for one of its higher volume products (a valve), is as follows Direct materials (5 lbs. S4.00) Direct labor (1.4 hrs.$10.50) Variable overhead (1.4 hrs.S6.00) Fixed overhead (1.4 hrs.S3.00) $20.00 14.70 8.40 4.20 $47.30 Standard unit cost During the year, Nosemer experienced the following activity relative to the produc tion of valves: a. Production of valves totaled 25,000 units. b. A total of 130,000 pounds of direct materials was purchased at $3.70 per pound c. There were 10,000 pounds of direct materials in beginning inventory (carried at $4 er pound). There was no ending inventory Chapter 9 Standard Costing: A Functional-Based Control Approach 331 d. The company used 36,500 direct labor hours at a total cost of $392,375 e. Actual fixed overhead totaled $95,000 f Actual variable overhead totaled $210,000 Nosemer produces all of its valves in a single plant. Normal activity is 22,500 units per year. Standard overhead rates are computed based on normal activity measured in standard direct labor hours