Direct Materials, Direct Labor, and Overhead Variances, Journal Entries

Rand Company produces dry fertilizer. At the beginning of the year, Rand had the following standard cost sheet:

Direct materials $(8$ lbs$.$ @ $$1\mathrm{.}30)$$$10\mathrm{.}40$Direct labor $(0\mathrm{.}2$ hr$.$ @ $$18\mathrm{.}00)3\mathrm{.}60$Fixed overhead $(0\mathrm{.}2$ @ $$3\mathrm{.}00)0\mathrm{.}60$Variable overhead $(0\mathrm{.}2$ hr$.$ @ $$1\mathrm{.}70)0\mathrm{.}34$Standard cost per unit$$14\mathrm{.}94$

Overhead rates are computed using practical volume, which is $50,000$ units. The actual results for the year are as follows:

Units produced: $51,000$

Direct materials purchased: $408,000$ pounds at $$1\mathrm{.}32$ per pound

Direct materials used: $406,800$ pounds

Direct labor: $10,500$ hours at $$17\mathrm{.}95$ per hour

Fixed overhead: $$30,680$

Variable overhead: $$18,000$ Required:

Nota: Enter all variances as positive amounts.

$1.$ Compute price and usage variances for dieect materials.

$2.$ Compute the divect labor rate and latore efficingcy vierianoes.

$3.$ Compute the fixed owizhead spending and volume variances.

$4.$ Compute the variable areerhead spending and efficiency variancess.

Spordies Wariance $4$ Efficiency Variance $3$

$5.$ Prepare joursal entrias for the following:

a$-$ The purchase of direct matierials

b$.$ The iscesance of cirvet materials to peodaction $($Work in Procisa$)$

C$.$ The addikion of direct labor to Wark in frooess

d$.$ The addition of criehead to Werk in Prociss

e$.$ The incurrence of actual owirlwad cossts

If an ambure box dees not require an entry, leave it thark.

b$.$

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C$.$ Mrepare journal entries for the desing out of variabios to Cost of Coods Sold. Post amounts from highest to loweat. If an amount box does mot require an emtry, leaver it blank.

Fisc, dlose dived materials and direct bator varianocs:

Second, recogrice the overhead vieriances:

Post amounts from highest to lowest. If an amount box does not require an entry, leave it blank.

Third, dase the owirlead variancess:

Post amounts from highest to lowest. Combine all amounts to coGS and post as a single amount. If an amount box does not require an entry, leave it blank.