DL Standards Quantity per Unit Price DM 3.0 pounds $4.00 per pound 1.2 DL hours $14.00 per DI. hour Variable-MOH 2.0 machine hours $3.50 per machine hour Fixed-MOH 2.0 machine hours $6.80 per machine hour Other key budgeted and actual information: Actual units produced: 25,300. Actual DM quantity purchased: 79,000 pounds at $4.10 per pound. Actual DM quantity used: 75,000 pounds. Actual DL hours used: 31,200 hours at $14.25 per hour. Actual machine hours used: 48,800. Actual variable-MOH cost was $166,300; budgeted variable-MOH cost was $161,000. Actual fixed-MOH cost was $320,000; budgeted fixed-MOH cost was $312,800. Required a. Conduct a complete variance analysis for all four main product costs (DM, DL, variable-MOH price and efficiency variances, and fixed-MOH price and volume variances). Specify the amount and sign of each variance. b. Record journal entries for the following transactions using standard costing. 1. The purchase of DM on account. 2. The transfer of DM into production. 3. The accrual of DL.cost. 4. Actual MOH cost incurred as follows. Variable-MOH costs included $100,000 of accrued indirect labor and $66,300 of accrued utility cost. Fixed-MOH costs included $200,000 of depreciation on plant assets and $120,000 of accrued super- visor salaries. 5. The application of variable-MOH and fixed-MOH cost to production. 6. Recognition of specific variable-MOH and fixed-MOH variances, when closing the respective MOH control accounts. 7. Completion of production on 25,300 units (there were no units still in process at the end of the year). 8. The sale of 18,900 units on account for $80 each. c. Show the effects of the above journal entries in T-accounts for the following specific accounts, and deter- mine ending balances (assume all beginning balances were zero): DM Inventory, WIP Inventory, FG Inventory, COGS, Variable-MOH Control, and Fixed-MOH Control DL Standards Quantity per Unit Price DM 3.0 pounds $4.00 per pound 1.2 DL hours $14.00 per DI. hour Variable-MOH 2.0 machine hours $3.50 per machine hour Fixed-MOH 2.0 machine hours $6.80 per machine hour Other key budgeted and actual information: Actual units produced: 25,300. Actual DM quantity purchased: 79,000 pounds at $4.10 per pound. Actual DM quantity used: 75,000 pounds. Actual DL hours used: 31,200 hours at $14.25 per hour. Actual machine hours used: 48,800. Actual variable-MOH cost was $166,300; budgeted variable-MOH cost was $161,000. Actual fixed-MOH cost was $320,000; budgeted fixed-MOH cost was $312,800. Required a. Conduct a complete variance analysis for all four main product costs (DM, DL, variable-MOH price and efficiency variances, and fixed-MOH price and volume variances). Specify the amount and sign of each variance. b. Record journal entries for the following transactions using standard costing. 1. The purchase of DM on account. 2. The transfer of DM into production. 3. The accrual of DL.cost. 4. Actual MOH cost incurred as follows. Variable-MOH costs included $100,000 of accrued indirect labor and $66,300 of accrued utility cost. Fixed-MOH costs included $200,000 of depreciation on plant assets and $120,000 of accrued super- visor salaries. 5. The application of variable-MOH and fixed-MOH cost to production. 6. Recognition of specific variable-MOH and fixed-MOH variances, when closing the respective MOH control accounts. 7. Completion of production on 25,300 units (there were no units still in process at the end of the year). 8. The sale of 18,900 units on account for $80 each. c. Show the effects of the above journal entries in T-accounts for the following specific accounts, and deter- mine ending balances (assume all beginning balances were zero): DM Inventory, WIP Inventory, FG Inventory, COGS, Variable-MOH Control, and Fixed-MOH Control
