MONTANA CORPORATION

has the following standard cost sheet for its main product:

The fixed and variable overhead rates were based on expected activity of 2,500 hours.

During the year, the following actual results were recorded:

REQUIRED:

1. Compute the direct materials price and usage variances, and the direct labor rate and efficiency variances. Record the journal entries using standard costing. For direct materials, do the variances for the following 2 scenarios: a) 11,000 feet purchased and used, b) 11,750 purchased and 11,000 used (as shown above)

2. Compute the variable overhead spending and efficiency variances.

3. Compute the fixed overhead spending and volume variances

4. Record all related journal entries for above under standard costing.

Direct materials Direct labor Variable overhead Fixed overhead 2 feet at 0.5 hours at 0.5 hours at 0.5 hours at $5 per foot $10 per hour $2 per hour $4 per hour $10 $5 $1 $2 Standard unit cost $18