Mcknight manulactutes cofiee mugs that it sells to other companies for customiting wth their Actual cost and production information for July 2024 folows: own logos. Mcknight propoees flexible budgets and uses a standard oost system to control manulacturing costs. The standard unt cost of a cotlee mug is based on static budget volume of (1) (Cick the ioon to view actual cont and production information) 60,000 coffee mugs per month: Resd the reduicuments. (Click the icon to viow the cost data.) Requirement 1. Compute the cont and eficiency varances for drect malenals and direct labed: Begin with the cont veriances. Seloct the roquined formulas, compute the cost varances for diroct materals and drect tabog, and idently whether each viariance is favorable (F) or untevorable (U) Data table More info a. There were no beginning or ending inventory balances. All expenditures were on account. b. Actual production and sales were 62,700 coffee mugs. c. Actual direct materials usage was 10,000lbs. at an actual cost of $0.17 per lb. d. Actual direct labor usage was 200,000 minutes at a total cost of $30,000. e. Actual overhead cost was $10,000 variable and $30,900 fixed. f. Selling and administrative costs were $130,000. Requirements 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. Journalize the actual manufacturing overhead and the allocated manufacturing overhead. Journalize the movement of all productiodn costs from Work-in-Process Inventory. Journalize the adjusting of the Manufacturing Overhead account. 5. McKnight intentionally hired more highly skilled workers during July. How did this decision affect the cost variances? Overall, was the decision wise