Petrillo Company produces engine parts for large motors The company uses a standard cost system for production costing and control The standard cost sheet for one of its higher volume products (a valve) is as follows Direct materials (7 lbs $5 40) $37 80 Direct labor (1 75 hrs $18) 31 50 Variable overhead (1 75 hrs $4 00) 7 00 Fixed overhead (1 75 hrs $3 00) 5 25 Standard cost per unit $81 55 During the year, Petrillo had the following activity related to valve production Production of valves totaled 20,600 units A total of 135,600 pounds of direct materials was purchased at $5 36 per pound There were 10,000 pounds of direct materials in beginning inventory (carried at $5 40 per pound) There was no ending inventory The company used 36,500 direct labor hours at a total cost of $656,270 Actual fixed overhead totaled $110,000 Actual variable overhead totaled $171,000 Petrillo produces all of its valves in a single plant Normal activity is 20,000 units per year Standard overhead rates are computed based on normal activity measured in standard direct labor hours 3 Compute overhead variances using a two variance analysis Budget Variance $fill in the blank 76289cff503001a 9 Unfavorable Volume Variance $fill in the blank 76289cff503001a 11 Favorable 6 Prepare all possible journal entries (assuming a four variance analysis of overhead variances) For compound entries, if an amount box does not require an entry, leave it blank a Record materials purchase Materials fill in the blank 5aec3202607efe1 2 fill in the blank 5aec3202607efe1 3 Direct Materials Price Variance fill in the blank 5aec3202607efe1 5 fill in the blank 5aec3202607efe1 6 Accounts Payable fill in the blank 5aec3202607efe1 8 fill in the blank 5aec3202607efe1 9 b Record materials usage Work in Process fill in the blank 5aec3202607efe1 11 fill in the blank 5aec3202607efe1 12 Direct Materials Usage Variance fill in the blank 5aec3202607efe1 14 fill in the blank 5aec3202607efe1 15 Materials fill in the blank 5aec3202607efe1 17 fill in the blank 5aec3202607efe1 18 c Record direct labor Work in Process fill in the blank 5aec3202607efe1 20 fill in the blank 5aec3202607efe1 21 Direct Labor Efficiency Variance fill in the blank 5aec3202607efe1 23 fill in the blank 5aec3202607efe1 24 Direct Labor Rate Variance fill in the blank 5aec3202607efe1 26 fill in the blank 5aec3202607efe1 27 Wages Payable fill in the blank 5aec3202607efe1 29 fill in the blank 5aec3202607efe1 30 d Close materials usage and labor variances to CGS Cost of Goods Sold fill in the blank 5aec3202607efe1 32 fill in the blank 5aec3202607efe1 33 Direct Labor Rate Variance fill in the blank 5aec3202607efe1 35 fill in the blank 5aec3202607efe1 36 Direct Materials Usage Variance fill in the blank 5aec3202607efe1 38 fill in the blank 5aec3202607efe1 39 Direct Labor Efficiency Variance fill in the blank 5aec3202607efe1 41 fill in the blank 5aec3202607efe1 42 e Close price variance to CGS Direct Materials Price Variance fill in the blank 5aec3202607efe1 44 Cost of Goods Sold fill in the blank 5aec3202607efe1 46 f Record actual variable overhead Variable Overhead Control fill in the blank 5aec3202607efe1 48 Miscellaneous Accounts fill in the blank 5aec3202607efe1 50 g Record actual fixed overhead Fixed Overhead Control fill in the blank 5aec3202607efe1 52 Various Accounts fill in the blank 5aec3202607efe1 54 h Apply variable overhead Work in Process fill in the blank 5aec3202607efe1 56 Variable Overhead Control fill in the blank 5aec3202607efe1 58 i Apply fixed overhead Work in Process fill in the blank 5aec3202607efe1 60 Fixed Overhead Control fill in the blank 5aec3202607efe1 62 j Record overhead variances Variable Overhead Spending Variance fill in the blank 5aec3202607efe1 64 fill in the blank 5aec3202607efe1 65 Variable Overhead Efficiency Variance fill in the blank 5aec3202607efe1 67 fill in the blank 5aec3202607efe1 68 Fixed Overhead Spending Variance fill in the blank 5aec3202607efe1 70 fill in the blank 5aec3202607efe1 71 Fixed Overhead Volume Variance fill in the blank 5aec3202607efe1 73 fill in the blank 5aec3202607efe1 74 Fixed Overhead Control fill in the blank 5aec3202607efe1 76 fill in the blank 5aec3202607efe1 77 Variable Overhead Control fill in the blank 5aec3202607efe1 79 fill in the blank 5aec3202607efe1 80 k Close spending and efficiency variances to CGS Cost of Goods Sold fill in the blank 5aec3202607efe1 82 fill in the blank 5aec3202607efe1 83 Variable Overhead Efficiency Variance fill in the blank 5aec3202607efe1 85 fill in the blank 5aec3202607efe1 86 Fixed Overhead Spending Variance fill in the blank 5aec3202607efe1 88 fill in the blank 5aec3202607efe1 89 Variable Overhead Spending Variance fill in the blank 5aec3202607efe1 91 fill in the blank 5aec3202607efe1 92 l Close volume variance to CGS Fixed Overhead Volume Variance fill in the blank 5aec3202607efe1 94 Cost of Goods Sold fill in the blank 5aec3202607efe1 96

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Petrillo Company produces engine parts for large motors. The company uses a standard cost system for production costing and control. The standard cost sheet for

Petrillo Company produces engine parts for large motors. The company uses a standard cost system for production costing and control. The standard cost sheet for one of its higher volume products (a valve) is as follows:

Direct materials (7 lbs. @ $5.40)	$37.80
Direct labor (1.75 hrs. @ $18)	31.50
Variable overhead (1.75 hrs. @ $4.00)	7.00
Fixed overhead (1.75 hrs. @ $3.00)	5.25
Standard cost per unit	$81.55

During the year, Petrillo had the following activity related to valve production:

Production of valves totaled 20,600 units.
A total of 135,600 pounds of direct materials was purchased at $5.36 per pound.
There were 10,000 pounds of direct materials in beginning inventory (carried at $5.40 per pound). There was no ending inventory.
The company used 36,500 direct labor hours at a total cost of $656,270.
Actual fixed overhead totaled $110,000.
Actual variable overhead totaled $171,000.

Petrillo produces all of its valves in a single plant. Normal activity is 20,000 units per year. Standard overhead rates are computed based on normal activity measured in standard direct labor hours.

3. Compute overhead variances using a two-variance analysis.

Budget Variance	$fill in the blank 76289cff503001a_9	Unfavorable
Volume Variance	$fill in the blank 76289cff503001a_11	Favorable

6. Prepare all possible journal entries (assuming a four-variance analysis of overhead variances). For compound entries, if an amount box does not require an entry, leave it blank.

a.	Record materials purchase
	Materials	fill in the blank 5aec3202607efe1_2	fill in the blank 5aec3202607efe1_3
	Direct Materials Price Variance	fill in the blank 5aec3202607efe1_5	fill in the blank 5aec3202607efe1_6
	Accounts Payable	fill in the blank 5aec3202607efe1_8	fill in the blank 5aec3202607efe1_9

b.	Record materials usage
	Work in Process	fill in the blank 5aec3202607efe1_11	fill in the blank 5aec3202607efe1_12
	Direct Materials Usage Variance	fill in the blank 5aec3202607efe1_14	fill in the blank 5aec3202607efe1_15
	Materials	fill in the blank 5aec3202607efe1_17	fill in the blank 5aec3202607efe1_18

c.	Record direct labor
	Work in Process	fill in the blank 5aec3202607efe1_20	fill in the blank 5aec3202607efe1_21
	Direct Labor Efficiency Variance	fill in the blank 5aec3202607efe1_23	fill in the blank 5aec3202607efe1_24
	Direct Labor Rate Variance	fill in the blank 5aec3202607efe1_26	fill in the blank 5aec3202607efe1_27
	Wages Payable	fill in the blank 5aec3202607efe1_29	fill in the blank 5aec3202607efe1_30

d.	Close materials usage and labor variances to CGS
	Cost of Goods Sold	fill in the blank 5aec3202607efe1_32	fill in the blank 5aec3202607efe1_33
	Direct Labor Rate Variance	fill in the blank 5aec3202607efe1_35	fill in the blank 5aec3202607efe1_36
	Direct Materials Usage Variance	fill in the blank 5aec3202607efe1_38	fill in the blank 5aec3202607efe1_39
	Direct Labor Efficiency Variance	fill in the blank 5aec3202607efe1_41	fill in the blank 5aec3202607efe1_42

e.	Close price variance to CGS
	Direct Materials Price Variance	fill in the blank 5aec3202607efe1_44
	Cost of Goods Sold		fill in the blank 5aec3202607efe1_46

f.	Record actual variable overhead
	Variable Overhead Control	fill in the blank 5aec3202607efe1_48
	Miscellaneous Accounts		fill in the blank 5aec3202607efe1_50

g.	Record actual fixed overhead
	Fixed Overhead Control	fill in the blank 5aec3202607efe1_52
	Various Accounts		fill in the blank 5aec3202607efe1_54

h.	Apply variable overhead
	Work in Process	fill in the blank 5aec3202607efe1_56
	Variable Overhead Control		fill in the blank 5aec3202607efe1_58

i.	Apply fixed overhead
	Work in Process	fill in the blank 5aec3202607efe1_60
	Fixed Overhead Control		fill in the blank 5aec3202607efe1_62

j.	Record overhead variances
	Variable Overhead Spending Variance	fill in the blank 5aec3202607efe1_64	fill in the blank 5aec3202607efe1_65
	Variable Overhead Efficiency Variance	fill in the blank 5aec3202607efe1_67	fill in the blank 5aec3202607efe1_68
	Fixed Overhead Spending Variance	fill in the blank 5aec3202607efe1_70	fill in the blank 5aec3202607efe1_71
	Fixed Overhead Volume Variance	fill in the blank 5aec3202607efe1_73	fill in the blank 5aec3202607efe1_74
	Fixed Overhead Control	fill in the blank 5aec3202607efe1_76	fill in the blank 5aec3202607efe1_77
	Variable Overhead Control	fill in the blank 5aec3202607efe1_79	fill in the blank 5aec3202607efe1_80

k.	Close spending and efficiency variances to CGS
	Cost of Goods Sold	fill in the blank 5aec3202607efe1_82	fill in the blank 5aec3202607efe1_83
	Variable Overhead Efficiency Variance	fill in the blank 5aec3202607efe1_85	fill in the blank 5aec3202607efe1_86
	Fixed Overhead Spending Variance	fill in the blank 5aec3202607efe1_88	fill in the blank 5aec3202607efe1_89
	Variable Overhead Spending Variance	fill in the blank 5aec3202607efe1_91	fill in the blank 5aec3202607efe1_92

l.	Close volume variance to CGS
	Fixed Overhead Volume Variance	fill in the blank 5aec3202607efe1_94
	Cost of Goods Sold		fill in the blank 5aec3202607efe1_96