Question #$1$

The following information pertains to the Lebowski Corporation:

VMOH & FMOH are both allocated using direct labor hours.

a$)$ Calculate the following variances:

Direct materials price variance

Direct materials efficiency variance

Direct manufacturing labor rate variance

Direct manufacturing labor efficiency variance

VMOH spending variance

VMOH efficiency variance

FMOH spending variance

FMOH production$-$volume variance

b$)$ Prepare the following journal entries:

Purchase of direct materials

Usage of direct materials

Paying of wages for direct manufacturing labor

Incurrence of VMOH&FMOH

Application of VMOH & FMOH to production

Closing out VMOH and FMOH accounts

Closing out variances to COGS

c$)$ Provide a specific explanation for each variance calculated in part A