\fProblem 24.7A, pages 1067-1068 a. Compute the following cost variances for the month of July. 1. Materials price variance 800 x ($130 -132) = -$1,600 (or $1,600 unfavorable) 2. Materials quantity variance $130 x (1,000 - 800) = $26,000 (favorable) 3. Labor rate variance 5.5 x ($8 - 7.80) = $1.10 (favorable) 4. Labor efficiency variance $8 x (5 - 5.5) = -$4 (or $4 unfavorable) 5. Overhead spending variance (Actual hours x Actual overhead rate) - (Actual hours x Standard overhead rate) (5.5 x $23.10) - (5.5 x $22) = $6.05 (favorable) 6. Volume variance Standard overhead rate x (Actual units - Standard units) $22 x (800 - 1,000) = -$4,400 (or $4,400 unfavorable) b. Prepare journal entries to assign manufacturing costs to the Work in Process Inventory account and to record cost variance for July. Use separate entries for (1) direct materials, (2) direct labor, and (3) overhead costs. Work in process inventory (at standard cost) Materials price variance 1,600 Materials quantity variance 26.000 Direct materials inventory (at actual cost) To record the cost of direct materials used in July