During the year Phoenix completed the following transactions: a. Purchased (with cash) 464,000 pounds of raw material at a price of $30.50 per pound. b. Added 433,200 pounds of raw material to work in process to produce 126,600 units. C. Assigned direct labor costs to work in process. The direct laborers (who were paid in cash) worked 266,600 hours at an average cost of $15.00 per hour to manufacture 126,600 units. d. Applied variable manufacturing overhead to work in process inventory using the variable portion of the predetermined overhead rate multiplied by the number of direct labor-hours allowed to manufacture 126,600 units. Actual variable manufacturing overhead costs for the year (all paid in cash) were $481,600. e. Applied fixed manufacturing overhead to work in process inventory using the fixed portion of the predetermined overhead rate multiplied by the number of direct labor-hours allowed to manufacture 126,600 units. Actual fixed manufacturing overhead costs for the year were $2,454,000. Of this total, $1,308,000 related to items such as insurance, utilities, and salaried indirect laborers that were all paid in cash and $1,146,000 related to depreciation of equipment. f. Transferred 126,600 units from work in process to finished goods. g. Sold (for cash) 123,800 units to customers at a price of $175 per unit. h. Transferred the standard cost associated with the 123,800 units sold from finished goods to cost of goods sold. i. Paid $1,700,000 of selling and administrative expenses. j. Closed all standard cost variances to cost of goods sold. Required: 1. Compute all direct materials, direct labor, variable overhead, and fixed overhead variances for the year. 2. Record transactions a through j for Phoenix Company. 3. Compute the ending balances for Phoenix Company's balance sheet. 4. Prepare Phoenix Company's income statement for the year. Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Req 4 Compute all direct materials, direct labor, variable overhead, and fixed overhead variances for the year. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round intermediate calculations to two decimal places.) $ Materials price variance Materials quantity variance Labor rate variance 696,000 U OU $ Labor efficiency variance Variable overhead rate variance Variable overhead efficiency variance Budget variance Volume variance Reg 1 Req 2 and 3 Phoenix Company manufactures only one product and uses a standard cost system. The company uses a plantwide predetermined overhead rate that relies on direct labor-hours as the allocation base. The predetermined overhead rate is based on a cost formula that estimated $2,889,600 of fixed and variable manufacturing overhead for an estimated allocation base of 240,800 direct labor- hours. Phoenix does not maintain any beginning or ending work in process inventory. The company's beginning balance sheet is as follows: Phoenix Company Balance Sheet 1/1/XX (dollars in thousands ) Assets Cash Raw materials inventory Finished goods inventory All other assets Total assets Liabilities and Equity Retained earnings Total liabilities and equity $ 1,600 380 700 13,600 $16,280 $16,280 $16,280 The company's standard cost card for its only product is as follows: Inputs Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total standard cost per unit (1) (2) Standard Standard Quantity Price or Hours or Rate 3 pounds $29.00 per pound 2.00 hours $ 18.00 per hour 2.00 hours $ 2.00 per hour 2.00 hours $ 10.00 per hour Standard Cost (1) X (2) $ 87.00 36.00 4.00 20.00 $147.00
