P10.37 Variances; process costing; journal entries: manufacturer LO 10.5@, 10.110 Office Magic Ltd manufactures ergonomic office equipment. The standard cost for material and labour is $190 per unit. This includes 8 kilograms of direct material at a standard cost of $5 per kilogram, and 6 hours of direct labour at $25.00 per hour. The following data relate to November: work in process inventory, 1 November: none work in process inventory, 30 November: 800 units (75 per cent complete as to labour; material is issued at the beginning of processing) units completed: 5 600 units purchase of materials: 50 000 kilograms for $249 250 total actual labour costs: $917 000 1 I actual labour hours: 36 500 hours direct material quantity variance: $1 500 unfavourable. Required Page 1. Calculate the following amounts for November (indicate whether each variance is favourable or unfavourable): (a) direct labour rate variance (b) direct labour efficiency variance (c) actual kilograms of material used in the production process (d) actual price paid per kilogram of direct material (e) total amounts of direct material and direct labour transferred to finished goods inventory (f) the total amount of direct material and direct labour cost in the ending balance of work in process inventory. 2. Prepare journal entries to record the following: (a) purchase of raw material (b) adding direct material to work in process inventory (C) adding direct labour to work in process inventory (d) recording of variances