Cole Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system. Cole allocates overhead based on yards of direct materials. The$$ company's performance report includes the following selected$$ data:

LOADING...$($Click the icon to view the selected$$ data.$)$

Read the requirementsLOADING....

Question content area bottom

Part $1$

Requirement $1.$ Prepare a flexible budget based on the actual number of recliners sold. $($Round budget amounts per unit to the nearest$$ cent.$)$

Cole Recliners

Flexible Budget

Budget

Amounts

per Unit

Actual Units $($Recliners$)$

Sales Revenue

Variable Manufacturing Costs:

Direct Materials

Direct Labor

Variable Overhead

Fixed Manufacturing Costs:

Fixed Overhead

Total Cost of Goods Sold

Gross ProfitRequirements

Record the journal entries for direct materials, direct labor, variable overhead, and

fixed overhead, assuming all expenditures were on account and there were no

beginning or ending balances in the inventory accounts $($all materials purchased

were used in production, and all goods produced were sold$).$ Record the journal

entries for the transfer to Finished Goods Inventory and Cost of Goods Sold $($omit

the journal entry for Sales Revenue$).$ Record the journal entry to adjust the

Manufacturing Overhead account. $($Record debits first, then credits. Select the

explanation on the last line of the journal entry table.$)$

Data table

Standards:

$3$ yards of cloth per unit at $$1\mathrm{.}25$ per yard

$2$ direct labor hours per unit at $$17\mathrm{.}50$ per hour

Overhead allocated at $$4\mathrm{.}00$ per direct labor hour

Actual:

$2,700$ yards of cloth were purchased at $$1\mathrm{.}30$ per yard

Employees worked $1,500$ hours and were paid $$17\mathrm{.}00$ per hour

Actual variable overhead was $$2,000$

Actual fixed overhead was $$3,900$

Data table