PROBLEM ONE

Delsman Company manufactures auto parts. The company installed a standard costing system to

account for manufacturing costs.

Presented below are planned manufacturing data for $2023$ and actual data for October $2023.$ The

company applies overhead based upon machine hours. The denominator level of production is

$4,500$ units.

The standard cost card is as follows:

Direct materials

Direct labor

Variable overhead

Fixed overhead

During the year:

Actual production

Materials purchased

Materials used

Actual direct labor cost

Actual fixed overhead

Actual variable overhead

Actual machine hours used

All production was completed.

$4,200$ units were sold for $$295$ each.

Selling expense was $$6$ per each unit sold plus an additional $$124,000.$

Record the net variance to cost of good sold.

REQUIRED:

Journalize the above transactions $($ie$.$ items $2-6,8-11).$

Determine the eight production variances and indicated whether each is favorable or

unfavorable.

Calculate the three$-$way and two$-$way variances.

Calculate actual operating income using a traditional gross margin income statement $($ie$.$

include the adjustment for variances$).$