Pina, Inc. is known throughout the world for its H2O-X high-capacity water pump, used in irrigation systems. The company uses a standard costing system, and the pump's standard cost is as follows. The company's predetermined fixed overhead rate is based on an expected capacity of 120.000 direct labor hours per month Standard Cost $75 Standard Price Direct materials $5 per pound Direct labor $9 per DLH Variable overhead $9 per DLH Fixed overhead $6 per DLH Standard Quantity 15 pounds SDLH 5 DLH 5 DLH 45 45 $195 During the month of September, the company produced 20.800 of the 24.000 pumps that had been scheduled for production in the budget. The company used 367,000 pounds of material during September. The direct labor payroll for the month was $1.105,100 for 110,510 direct labor hours, Variable overhead costs were $982,390; fixed overhead costs were $755,300. The company's purchasing agent signed a new supply contract that resulted in purchases of 480,000 pounds of direct materials at a price of $2,100,000 (a) Prepare the journal entries to record the purchase and use of direct materials during September (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1 To record the purchase of material) 2. (To record the use of material) (b) Prepare the journal entry to record the use of direct labor during September. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record direct labor) (c) Prepare the journal entry to record actual variable overhead costs incurred. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record actual variable manufacturing overhead) (a) Prepare the journal entry to record the application of variable overhead to production. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record applied variable manufacturing overhead (e) Prepare the journal entry to record actual fixed overhead costs incurred. (Credit account tities are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record actual fixed manufacturing overhead) (0) Prepare the journal entry to record the application of fixed overhead to production (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record applied fixed manufacturing overhead (8) Prepare the journal entries to record the variable and fixed overhead variances. (Credit account tities are automatically indented when amount is entered. Do not indent manually.) (g) Prepare the journal entries to record the variable and fixed overhead variances. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit No. Account Titles and Explanation 1. (To record variable overhead variances) 2. (To record fixed overhead variances) (h) Prepare the journal entry to close all variances to Cost of Goods Sold. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To close variances to Cost of Goods Sold)
