During 2020, The Chen Corporation had the following actual results:

Thing One Thing Two

Finished Units: Units Completed and Sold 65,000 40,000

(Assume the sales price per unit was the same as the amount budgeted in your Operating Budget in the Chapter 6 Computer Problem)

(Assume there were no units in beginning inventory of finished goods)

(Assume that work-in-process was negligible)

Material purchased:

A 700,000 lbs. purchased at $9,030,000

B 490,000 lbs. purchased at 3,871,000

C 150,000 purchased at 1,012,500

(Assume there were no materials in beginning inventory)

Material used:

A 690,000 lbs.

B 480,000 lbs.

C 130,000 each

Direct Labor:

Thing One- Actual direct labor hours used 275,000 at $3,492,500

Thing Two- Actual direct labor hours used 210,000 at $3,769,500

Factory Overhead:

Actual Variable Factory Overhead- $3,267,500 Thing One

Actual Variable Factory Overhead- $2,499,000 Thing Two

Actual Fixed Factory Overhead - $4,173,000

Please Answer the following:

4. Compute the Variable Overhead Spending and Efficiency Variances for

Thing One and Thing Two and the required journal entries for:

Incurrence of actual Variable Overhead.

Allocation of Variable Overhead.

To close the two variable overhead accounts and isolate variances.

(Record one set of entries for Thing One and one set of entries for Thing Two)

5. Compute the Fixed Overhead Spending and Production Volume Variances and record the journal entries for:

Incurrence of actual Fixed overhead.

Allocation of Fixed Overhead.

To close the two fixed overhead accounts and isolate variances.

(Record one set of entries. Do not separate Thing One and Thing Two)

The videos in Module 8 should assist you in this section.

6. Record the entry for goods completed and transferred to Finished Goods Assume all goods started were completed

5. Computation of Fixed Overhead Spending Variance Less: Fixed Speding Variance Favorable or Unfav. Computation of Budgeted fixed cost per hour Computation of Fixed Overhead Prod. Volume Variance Favorable or Unfavorable Production Volume Variance COMPUTATION OF STANDARD HOURS ALLOWED Total Thing one Thing Two Hours Joumal Entries 1. For Actual Variable Factory Overhead 2. For the Allocation of Varible Factory Overhead Debit Credit 3. To close variable overhead and isolate the variances Debit Credit