Problem 14-49 Standard Costs in Process Costing (Page 621) See textbook

Basic Capital Budgeting Techniques; No Taxes, Uniform Net Cash Inflows; Spreadsheets Bob Jensen Inc. purchased a $650,000 machine to manufacture specialty taps for electrical equipment. Jensen expects to sell all it can manufacture in the next 10 years. To encourage capital investments, the government has exempted taxes on profits from new investments. This legislation is to be in effect for the foreseeable future. The machine is expected to have a 10-year useful life with no salvage value. Jensen uses straight-line depreciation. The net cash inflow is expected to be $150,000 each year for 10 years. Jensen uses a 12% discount rate in evaluating capital investments. Assume, for simplicity, that MACRS depreciation rules do not apply.

Required Using Excel

1-Compute for November:

a)The direct labor efficiency variance, rounded to the nearest whole dollar. Is this variance favorable or unfavorable?

b)The direct labor rate variance, rounded to the nearest whole dollar. Is this variance favorable or unfavorable?

c)The actual number of kilograms of material used in the production process during the month, rounded to the nearest whole number.

d) The actual price paid per kilogram of material during the month, rounded to 3 decimal places (e.g., $3.4591 = $3.459); the company calculates the direct materials price variance at point of purchase.

e)The amount of direct materials cost and direct labor cost transferred to the Finished Goods Inventory account, each rounded to the nearest whole dollar.

f)The total amount of direct materials cost and direct labor cost in the Work-in-Process Inventory account at the end of the month, rounded to the nearest whole dollar.

2-Prepare journal entries to record all transactions, including the variances in requirement 1.