Kyler manufactures coffee mugs that it sells to other companies for customizing with their own logos. Kyler prepares flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a coffee mug is based on static budget volume of 59,700 coffee mugs per month: (Click the icon to view the cost data) Actual cost and production information i (Click the icon to view actual cost Read the requirements. Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. i Requirements Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials = Formula (AC-SC) AQ (AC-SC) AQ Direct materials cost variance Direct labor cost variance F = = Variance 800 6,090 $ $ Select the required formulas, compute the efficiency variances for direct materials and direct labor, and iden Formula Variance Direct materials efficiency variance = (AQ - SQ)X SC = $ 620 F Direct labor efficiency variance (AQ - SQ) SC = $ 2,054 U 1. Compute the cost and efficiency variances for direct materials and direct labor. 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, including the related variances. 3. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. 4. Joumalize the actual manufacturing overhead and the allocated manufacturing overhead. Journalize the movement of all production costs from Work-in-Process Inventory. Journalize the adjusting of the Manufacturing Overhead account. 5. Kyler intentionally hired more highly skilled workers during July. How did this decision affect the cost variances? Overall, was the decision wise? Jas Requirement 2. Journalize the purchase and usage of direct materials and the assignment of direct labor, i Begin by journalizing the purchase of direct materials, including the related variance. (Prepare a single com Date Accounts and Explanation Debit Credit Print Done Jul. i Data Table i More Info $ 0.05 0.39 a. There were no beginning or ending inventory balances. All expenditures were on account. b. Actual production and sales were 62,400 coffee mugs. c. Actual direct materials usage was 10,000 lbs. at an actual cost of $0.17 per lb. d. Actual direct labor usage was 203,000 minutes at a total cost of $32,480. e. Actual overhead cost was $4,060 variable and $36,440 fixed. f. Selling and administrative costs were $131,000. Direct Materials ( 0.2 lbs @ $ 0.25 per lb) Direct Labor ( 3 minutes @ $ 0.13 per minute) Manufacturing Overhead: Variable (3 minutes @ $ 0.04 per minute) $ (3 minutes @ $ 0.14 per minute) Total Cost per Coffee Mug 0.12 0.42 $ 0.54 0.98 Print Done Print Done