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Butrico Manufacturing Corporation uses a standard cost system, records materials price variances when direct materials are purchased, and prorates all variances at year-end. Variances associated
Butrico Manufacturing Corporation uses a standard cost system, records materials price variances when direct materials are purchased, and prorates all variances at year-end. Variances associated with direct materials are prorated based on the balances of direct materials in the appropriate accounts, and variances associated with direct labor and manufacturing overhead are prorated to Finished Goods Inventory and to Cost of Goods Sold {CGSJ on the basis of the relative direct labor cost in these accounts at year-end. 'he following information is for the year ended December 31: 'he company had no beginning inventories and no ending Work-in-Process {WIP} inventory. it applies manufacturing overhead at 80% of standard direct labor cost. Finished goods inventory at 12,81: Direct materials S 88,746 Direct labor 133,116 Applied manufacturing overhead 196,483 Direct materials inventory at 12.81 65,286 Cost of goods sold for the year ended 12(31: Direct materials S 354,966 Direct labor 34,296 Applied manufacturing overhead 563,432 Direct materials price variance (unfavorable) 16,286 Direct materials usage variance I{favorable} 15,386 Direct labor rate variance {unfavorable} 26,486 Direct labor efficiency variance (favorable) 5,186 Actual manufacturing overhead incurred T63,i386 I Required: 1. Compute the amount of Direct Materials Price Variance to be prorated to Finished Goods Inventory at December 3|. 2. Compute the total amount of direct rnaten'ais cost in the Finished Goods inventory at December 31. after all materials variances have been prorated. 3. Compute the total amount of directlabor costin the Finished Goods Inventory at December 31, after all variances have been prorated. 4. Compute the total Cost of Goods Sold [CGSJ for the year ended December 31. after all variances have been prorated. {For all requirements, round your intermediate calculations and nal answers to the nearest whole dollar amount.) a Answ complete but not an rely correct. 1. Direct materials pn'ce variance 5 2,384 a 2. Direct materials cost $ 85.?32 9 3. Direct labor cost $ 132350 0 4. Cost 01 goods sold 3 693.0?9 0
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