In all of the exercises involving variances, use "F" and "U" to designate favorable and unfavorable variances, respectively.

E8-1 through E8-5 use the following data:

The standard operating capacity of Tecate Manufacturing Co. is 1,000 units. A detailed study of the manufacturing data relating to the standard production cost of one product revealed the following:

1. Two pounds of materials are needed to produce one unit.

2. Standard unit cost of materials is $8 per pound.

3. It takes one hour of labor to produce one unit.

4. Standard labor rate is $10 per hour.

5. Standard overhead (all variable) for this volume is $4,000.

Each case in E8-1 through E8-5 requires the following:

a. Set up a standard cost summary showing the standard unit cost.

b. Analyze the variances for materials and labor.

c. Make journal entries to record the transfer to Work in Process

of:

1. Materials costs
2. Labor costs
3. Overhead costs

(When making these entries, include the variances.)

d. Prepare the journal entry to record the transfer of costs to the finished goods account.

1,000 units were started and finished.

Case 1: All prices and quantities are standard, except for the labor rate, which is $10.20 per hour.

Case 2: All prices and quantities are standard, except for labor hours, which totaled 900.