Chee Problem 15-45 Four-Variance Analysis; Journal Entries LO 15-1, 15-2,15-3, 15-4] Edney Company employs a standard cost system for product costing. The per-unit standard cost of its product is: 5 points Raw materials Direct labor (2 direct labor hours x $8.00 per hour) Manufacturing overhead (2 direct labor hours 10.00 per hour) $14.00 16.00 20.00 $50.00 eBook Print Total standard cost per unit References The manufacturing overhead rate is based on a normal capacity level of 600,000 direct labor hours. (Normal capacity is defined as the level of capacity needed to satisfy average customer demand over a period of two to four years. Operationally, this level of capacity would take into consideration sales trends and both seasonal and cyclical factors affecting demand.) The firm has the following annual manufacturing overhead budget: Variable Fixed $3,585,000 3,000,000 $6,585,000 Edney incurred $436,750 in direct labor cost for 55,200 direct labor hours to manufacture 26,000 units in November. Other costs incurred in November include $362,000 for fixed manufacturing overhead and $391,500 for variable manufacturing overhead 2. Prepare the following four journal entries: (a) to record actual variable overhead costs, (b) to record actual fixed overhead costs, (c) to record standard overhead costs applied to production, and (d) to record all four overhead cost variances. The company uses a single account, Factory Overhead, to record all overhead costs. Assume that the actual variable manufacturing overhead consists of utilities payable of $173,500, indirect materials of $134,000 (all materials, direct and indirect, are recorded in a single account, Materials Inventory), and $84,000 depreciation on factory equipment (determined under the units-of-production method). Assume that the fixed manufacturing overhead consists of accrued (i.e, unpaid) salaries of $77,000 and factory depreciation of $285,000. All unpaid salaries should be recorded in a single account, Accrued Payroll. 3. Prepare the appropriate journal entry to close all manufacturing overhead variances to the cost of goods sold (CGS) account. (Assume the cost variances you calculated above are for the year, not the month.) Journal entry worksheet 2 4 Record the standard overhead costs applied to production. Note: Enter debits before credits. Transaction General Journal Debit Credit ork in process inventory Factory overhead Record entry Clear entry View general journal Required 1 Required 3> Journal entry worksheet 2 4 Record the overhead cost variances for the period Note: Enter debits before credits. Transaction General Journal Debit Credit ixed factory overhead spending variance riable overhead efficiency varianc riable overhead spending variance Production volume variance 10,000 Factory overhead Record entry Clear entry View general journal K Required 1 Required 3> Required 1Required 2 Required 3 Prepare the appropriate journal entry to close all manufacturing overhead variances to the cost of goods sold (CGS) account. (Assume the cost variances you calculated above are for the year, not the month.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole Show more View transaction list Journal entry worksheet To record closing of overhead cost variances to cost of goods sold account. Note: Enter debits before credits Transaction General Journal Debit Credit Production volume variance Cost of goods sold (CGS) (a) 10,000 ariable overhead spending variance riable overhead efficiency variance ixed overhead spending variance Chee Problem 15-45 Four-Variance Analysis; Journal Entries LO 15-1, 15-2,15-3, 15-4] Edney Company employs a standard cost system for product costing. The per-unit standard cost of its product is: 5 points Raw materials Direct labor (2 direct labor hours x $8.00 per hour) Manufacturing overhead (2 direct labor hours 10.00 per hour) $14.00 16.00 20.00 $50.00 eBook Print Total standard cost per unit References The manufacturing overhead rate is based on a normal capacity level of 600,000 direct labor hours. (Normal capacity is defined as the level of capacity needed to satisfy average customer demand over a period of two to four years. Operationally, this level of capacity would take into consideration sales trends and both seasonal and cyclical factors affecting demand.) The firm has the following annual manufacturing overhead budget: Variable Fixed $3,585,000 3,000,000 $6,585,000 Edney incurred $436,750 in direct labor cost for 55,200 direct labor hours to manufacture 26,000 units in November. Other costs incurred in November include $362,000 for fixed manufacturing overhead and $391,500 for variable manufacturing overhead 2. Prepare the following four journal entries: (a) to record actual variable overhead costs, (b) to record actual fixed overhead costs, (c) to record standard overhead costs applied to production, and (d) to record all four overhead cost variances. The company uses a single account, Factory Overhead, to record all overhead costs. Assume that the actual variable manufacturing overhead consists of utilities payable of $173,500, indirect materials of $134,000 (all materials, direct and indirect, are recorded in a single account, Materials Inventory), and $84,000 depreciation on factory equipment (determined under the units-of-production method). Assume that the fixed manufacturing overhead consists of accrued (i.e, unpaid) salaries of $77,000 and factory depreciation of $285,000. All unpaid salaries should be recorded in a single account, Accrued Payroll. 3. Prepare the appropriate journal entry to close all manufacturing overhead variances to the cost of goods sold (CGS) account. (Assume the cost variances you calculated above are for the year, not the month.) Journal entry worksheet 2 4 Record the standard overhead costs applied to production. Note: Enter debits before credits. Transaction General Journal Debit Credit ork in process inventory Factory overhead Record entry Clear entry View general journal Required 1 Required 3> Journal entry worksheet 2 4 Record the overhead cost variances for the period Note: Enter debits before credits. Transaction General Journal Debit Credit ixed factory overhead spending variance riable overhead efficiency varianc riable overhead spending variance Production volume variance 10,000 Factory overhead Record entry Clear entry View general journal K Required 1 Required 3> Required 1Required 2 Required 3 Prepare the appropriate journal entry to close all manufacturing overhead variances to the cost of goods sold (CGS) account. (Assume the cost variances you calculated above are for the year, not the month.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole Show more View transaction list Journal entry worksheet To record closing of overhead cost variances to cost of goods sold account. Note: Enter debits before credits Transaction General Journal Debit Credit Production volume variance Cost of goods sold (CGS) (a) 10,000 ariable overhead spending variance riable overhead efficiency variance ixed overhead spending variance