PROBLEM 24.8A Understanding Cost Variances: Solving for Missing Data LO24-1,LO24-3, LO24-4 Ripley Corporation has supplied the following information obtained from its standard cost system in June. Standard price of direct materials $6 per pound Actual price of direct materials Standard direct labor rate Actual direct labor hours in June The following journal entries were made during June with respect to Ripley's standard cost system. Work in Process Inventory (at standard cost) Materials Quantity Variance Direct Materials Inventory (at actual cost) Materials Price Variance To record the cost of direct materials used in June. Work in Process Inventory (at standard cost) Labor Rate Variance $5 per pound $9 per hour 9,500 hours 48,000 1,200 41,000 8,200 81,000 950 Labor Efficiency Variance 4,500 Direct Labor (at actual cost) 86,450 To record the cost of direct labor charged to production in June. Work in Process Inventory (at standard cost) Overhead Spending Variance 25,000 2,000 Overhead Volume Variance Manufacturing Overhead (at actual cost) To apply overhead to production in June. Instructions a. Determine the actual quantity of materials purchased and used in production during June. b. Determine the standard quantity of materials allowed for the productive output achieved during June. c. Determine the actual average direct labor rate in June. d. Determine the standard direct labor hours allowed for the production output achieved during June. e. Determine the total overhead costs allowed for the production output achieved during June. f. Prepare a journal entry to record the transfer of all work in process to finished goods at the end of June. g. Close all cost variances directly to the Cost of Goods Sold account at the end of June. h. Was Ripley's production output in June more or less than its normal level of output? How can you tell? 5,000 22,000 Page 1077