Haliburton Mills Inc. is a large producer of men$$s and women$$s clothing. The company uses standard costs for all of its products. The standard costs and actual costs for a recent period are given below for one of the company$$s product lines $($per unit of product$)$:

Standard

Cost Actual

Cost

Direct materials:

Standard: $3\mathrm{.}0$ metres at $$4\mathrm{.}00$ per metre $ $12\mathrm{.}00$

Actual: $3\mathrm{.}2$ metres at $$3\mathrm{.}80$ per metre $ $12\mathrm{.}16$

Direct labour:

Standard: $2\mathrm{.}0$ hours at $$3\mathrm{.}50$ per hour $7\mathrm{.}00$

Actual: $1\mathrm{.}8$ hours at $$3\mathrm{.}85$ per hour $6\mathrm{.}93$

Variable manufacturing overhead:

Standard: $2\mathrm{.}0$ hours at $$1\mathrm{.}80$ per hour $3\mathrm{.}60$

Actual: $1\mathrm{.}8$ hours at $$2\mathrm{.}15$ per hour $3\mathrm{.}87$

Fixed manufacturing overhead:

Standard: $2\mathrm{.}0$ hours at $$3\mathrm{.}40$ per hour $6\mathrm{.}80$

Actual: $1\mathrm{.}8$ hours at $$3\mathrm{.}45$ per hour $6\mathrm{.}21$

Total cost per unit $ $29\mathrm{.}40$ $ $29\mathrm{.}17$

Actual costs: $6,000$ units at $$29\mathrm{.}17$ $ $175,020$

Standard costs: $6,000$ units at $$29\mathrm{.}40176,400$

Difference in cost$$favourable $ $1,380$

During this period, the company produced $6,000$ units of product. A comparison of standard and actual costs for the period on a total cost basis is also given above.

There was no inventory of materials on hand to start the period. During the period, $19,200$ metres of materials was purchased and used in production. The denominator level of activity for the period was $11,000$ hours.

Required:

$1.$ For direct materials:

a$.$ Compute the price and quantity variances for the period. $($Indicate the effect of each variance by selecting $"$F$"$ for favourable, $"$U$"$ for unfavourable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

b$.$ Prepare journal entries to record all activity relating to direct materials for the period.

$2.$ For direct labour:

a$.$ Compute the rate and efficiency variances. $($Indicate the effect of variance by selecting $"$F$"$ for favourable, $"$U$"$ for unfavourable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

b$.$ Prepare a journal entry to record the incurrence of direct labour cost for the period. $($List debit entries first$).$

$3.$ Compute the variable manufacturing overhead spending and efficiency variances. $($Indicate the effect of each variance by selecting $"$F$"$ for favourable, $"$U$"$ for unfavourable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

$4.$ Compute the fixed overhead budget and volume variances. $($Indicate the effect of variance by selecting $"$F$"$ for favourable, $"$U$"$ for unfavourable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

$5.$ On seeing the $$1,380$ total cost variance, the company$$s president stated, $$It$$s obvious that our costs are well under control.$$ Do you agree?

multiple choice

Yes

No

$6.$ This part of the question is not part of your Connect assignment.