Edney Company employs a standard cost system for product costing. The per-unit standard cost of its product is The manufacturing overhead rate is based on a normal capacity level of 600.000 direct labor hours. (Normal capacity is defined as the level of capacity needed to satisfy average customer demand over a period of two to four years. Operationally, this level of capacity would take into consideration sales trends and both seasonal and cyclical factors affecting demand) The firm has the following annual manufacturing overhead budget Edney incurred $436,350 in direct labor cost for 55,000 direct labor hours to manufacture 26,000 units in November. Other costs incurred in November include $350,000 for fixed manufacturing overhead and $382,500 for variable manufacturing overhead. Required: 1. Determine each of the following for November. [Note Indicate whether each variance is favorable (F) or unfavorable (U)] a. The variable overhead spending variance. b. The variable overhead efficiency variance. c. The fixed overhead spending (budget) variance d. The fixed overhead production volume variance e The total amount of under-or overapplied manufacturing overhead (i.e, the total manufacturing overhead cost variance for the period). 2. Prepare the following four journal entries: (o) to record actual variable overhead costs. (b) to record actual fixed overhead costs, (c) to record standard overhead costs applied to production, and (d) to record all four overhead cost variances. The company uses a single account, Factory Overhead, to record all overhead costs. Assume that the actual variable manufacturing overhead consists of utitities payable of $172,500, indirect materials of $130,000 (all materials, direct and indirect, are recorded in a single account. Materials inventory), and $80,000 depreciation on factory equipment (determined under the units-of-production method). Assume that the fixed manufacturing overhead consists of accrued (i.e, unpaid) salaries of $75,000 and factory depreciation of $275,000. All unpaid salaries should be recorded in a single account, Accrued Payroll. 3. Prepare the appropriate journal entry to close all manufocturing overhead variances to the cost of goods sold (COGS) account. (Assume the cost variances you calculated above are for the year, not the month) Complete this question by entering your answers in the tabs below. c. The fixed overhead spending (budget) variance. d. The fixed overhead production volume variance. e. The total amount of under- or overapplied manufacturing overhead (i.e., the total manufacturing overhead the period). (For all requirements, do not round intermediate calculations. Round your final answers to the nearest whole d Journal entry worksheet Record the actual variable overhead costs for the period. Note: Enter debits before credits. to record standard overthead costs opptied to prodaction, and fof to record all four overhead cost vanances. The compary uses a single account, Factory Owertiead, to recoed all overteced costs. Assume that the achusl variable monufacturng overhead consists of inlities payable of $172,500, indirect materials of $130,000 (al muterials, direct and indrect, are reconded in a single account. salaries should be recorded in a single account Accrued Payroll 3. Prepare the appropriate journal entry to close al manulacturing overhead varunces to the cost of goods sold (COGS) account. (Assume the cost variances you calculated above are for the year, not the monthy) Complete this questian by entering veur anwers in the tabs below. osllar airibunt.) Shore lesis Journal entry worksheet Necord dasing everthead cout variances to coust of goods seld
