chapter 6 2/2

Root manufactures coffee mugs that it sells to other companies for customizing with their own logos, Root prepares flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee mug is based on static budget volume of 59,700 coffee mugs per month Click the icon to view the cost data.) Actual cost and production information for July 2024 follows: Click the icon to view actual cost and production information.) Read the requirements Requirements Requirement 1. Compute the Begin with the cost variances favorable (F) or unfavorable (4 Ify whether each vari bst, SQ = standard qu Direct materials cost variance Direct labor cost variance Select the required formulas, unfavorable (U). (Abbreviation 1. Compute the cost and efficiency variances for direct materials and direct labor 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances 3. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances 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 5. Root intentionally hired more highly skilled workers during July. How did this decision affect the cost variances? Overall, was the decision wise? is favorable (F) or rd quantity) Direct materials efficiency vari More Info an a. There were no beginning or ending inventory balances. All expenditures were on account. b. Actual production and sales were 62,400 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 203,000 minutes at a total cost of $30,450. e. Actual overhead cost was $11,165 variable and $29,635 fixed. f. Selling and administrative costs were $120,000. alas iati Data Table $ 0.05 0.36 Direct Materials (0.2 lbs @ $0.25 per lb) Direct Labor (3 minutes @ $0.12 per minute) Manufacturing Overhead: Variable (3 minutes @ $0.06 per minute) Fixed (3 minutes @ $0.13 per minute) $ 0.18 0.39 0.57 $ 0.98 Total Cost per Coffee Mug mugs that it selis to other companies for customizing Actual cost and production information for July 2024 follows: Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. Bogin with the cost variances. Select the required formulas, compute the cost variances for direct materials and clirect labor, and identity 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 Direct materials cost variance Direct labor cost variance 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 Direct materials efficiency variance Direct labor efficiency variance Requirement 2. Joumalize 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) 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 Accounts and explanation Debit Credit Jul Now, joumalize the usage of direct materials, including the related variance. (Preparo a single compound journal entry) Accounts and Explanation Debit Cred) Date Jul Journalize the incurrance and assignment of direct labor costs, including the related variances. (Prepare a single compound journal entry) Date Accounts and Explanation Credit Debit Jul 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, XXXXX, and your final answers to the nearest whole dollar Abbreviations used: AC-actual cost, AQ - actual quantity, FOH - fixed overhead, SC - standard cost, sQ - standard quantity: VOH. Varianco nearest whole dollar Abbreviations used: AC = actual cost; AQ = actual quantity: FOH = fixed overhead, SC - standard cost; SQ = standard quantity: VOH = variable overhead) Formula VOH cos variance VOH efficiency variance Now compute the fixed overhead cost and volume variances. Select the required formulas, compute the fixed overhead cost and volume variances, and identity 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 FOH col varianco 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, (Rocord debit first, then credits. Select the explanation on the tast line of the journal entry table) Begin by Joumalizing the only to show the actual manufacturing overhead costs incurred Begin by journalizing the entry to show the actual manufacturing overhead costs incurred. Date Accounts and Explanation Debit Credit Jul. Journalize the applied manufacturing overhead. Date Accounts and Explanation Debit Credit Jul. Joumalize the movement of all production from Work-in-Process Inventory. Date Accounts and Explanation Debit Credit Jul. ws Journalize the adjusting of the Manufacturing Overhead account. (Prepare a single compound journal entry.) Date Accounts and Explanation Debit Credit Jul. Journalize the adjusting of the Manufacturing Overhead account. (Prepare a single compound journal entry) Date Accounts and Explanation Debit Credit Jul Requirement 5. Root intentionally hired more highly skilled workers during July. How did this decision affect the cost variances? Overall, was the decision we? Hiring more-skilled, higher-paid labor led to direct labor cost variance. Given the direct labor efficiency varianco, it appear that these more-skilled workers performed efficiently The overall not offect is thus management's decision was