Rand Company produces dry fertilizer At the beginning of the year, Rand had the following standard cost sheet Direct materials (5 lbs $2 60) $13 00 Direct labor (0 75 hr $18 00) 13 50 Fixed overhead (0 75 hr $4 00) 3 00 Variable overhead (0 75 hr $3 00) 2 25 Standard cost per unit $31 75 Overhead rates are computed using practical volume, which is 54,000 units The actual results for the year are as follows Units produced 53,000 Direct materials purchased 265,000 pounds $2 50 per pound Direct materials used 270,400 pounds Direct labor 40,100 hours at $17 95 per hour Fixed overhead $161,800 Variable overhead $121,900 Required Question Content Area 1 Compute price and usage variances for direct materials MPV $fill in the blank a27afe057034ffd 1 FavorableUnfavorableFavorable MUV $fill in the blank a27afe057034ffd 3 FavorableUnfavorableUnfavorable 2 Compute the direct labor rate and labor efficiency variances Labor Rate Variance $fill in the blank a27afe057034ffd 5 FavorableUnfavorableFavorable Labor Efficiency Variance $fill in the blank a27afe057034ffd 7 FavorableUnfavorableUnfavorable 3 Compute the fixed overhead spending and volume variances Spending Variance $fill in the blank a27afe057034ffd 9 FavorableUnfavorableFavorable Volume Variance $fill in the blank a27afe057034ffd 11 FavorableUnfavorableUnfavorable 4 Compute the variable overhead spending and efficiency variances Spending Variance $fill in the blank a27afe057034ffd 13 FavorableUnfavorableUnfavorable Efficiency Variance $fill in the blank a27afe057034ffd 15 FavorableUnfavorableUnfavorable Question Content Area 5 Prepare journal entries for the following The purchase of direct materials The issuance of direct materials to production (Work in Process) The addition of direct labor to Work in Process The addition of overhead to Work in Process The incurrence of actual overhead costs If an amount box does not require an entry, leave it blank a Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceMaterialsMaterials Direct Materials Price VarianceDirect Materials Usage VarianceFixed Overhead ControlMaterialsVarious AccountsDirect Materials Price Variance Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Usage VarianceFixed Overhead ControlAccounts Payable b MaterialsVariable Overhead ControlVarious AccountsWages PayableWork in ProcessWork in Process Direct Materials Price VarianceDirect Materials Usage VarianceFixed Overhead ControlMaterialsVarious AccountsDirect Materials Usage Variance Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceMaterialsMaterials c MaterialsVariable Overhead ControlVarious AccountsWages PayableWork in ProcessWork in Process Direct Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceDirect Materials Usage VarianceFixed Overhead ControlDirect Labor Efficiency Variance Direct Labor Rate VarianceDirect Materials Price VarianceDirect Materials Usage VarianceFixed Overhead ControlMaterialsDirect Labor Rate Variance Fixed Overhead ControlMaterialsVariable Overhead ControlVarious AccountsWages PayableWages Payable d Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceWages PayableWork in ProcessWork in Process Direct Materials Price VarianceDirect Materials Usage VarianceMaterialsVarious AccountsVariable Overhead ControlVariable Overhead Control Fixed Overhead ControlMaterialsVarious AccountsWages PayableWork in ProcessFixed Overhead Control e MaterialsVariable Overhead ControlVarious AccountsWages PayableWork in ProcessVariable Overhead Control Fixed Overhead ControlMaterialsVarious AccountsWages PayableWork in ProcessFixed Overhead Control Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceMaterialsVarious AccountsVarious Accounts Question Content Area f Prepare journal entries for the closing out of variances to Cost of Goods Sold If an amount box does not require an entry, leave it blank First, close direct materials and direct labor variances blank Cost of Goods SoldDirect Labor Efficiency VarianceDirect Materials Price VarianceDirect Materials Usage VarianceDirect Materials Price Variance Cost of Goods SoldDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Usage VarianceDirect Labor Rate Variance Direct Labor Rate VarianceDirect Materials Price VarianceDirect Materials Usage VarianceVariable Overhead ControlVariable Overhead Spending VarianceDirect Materials Usage Variance Direct Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceVariable Overhead ControlVariable Overhead Spending VarianceDirect Labor Efficiency Variance Cost of Goods SoldDirect Labor Rate VarianceDirect Materials Price VarianceVariable Overhead ControlVariable Overhead Spending VarianceCost of Goods Sold Question Content Area Second, recognize the overhead variances blank Cost of Goods SoldFixed Overhead ControlFixed Overhead Volume VarianceVariable Overhead ControlWork in ProcessFixed Overhead Volume Variance Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Spending VarianceWork in ProcessVariable Overhead Spending Variance Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Efficiency VarianceWork in ProcessVariable Overhead Efficiency Variance Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceFixed Overhead Spending Variance Cost of Goods SoldFixed Overhead ControlFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceFixed Overhead Control Cost of Goods SoldFixed Overhead Volume VarianceVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceVariable Overhead Control Question Content Area Third, close the overhead variances Note Close the variances with a debit balance first blank Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceCost of Goods Sold Cost of Goods SoldFixed Overhead ControlFixed Overhead Volume VarianceVariable Overhead ControlWork in ProcessFixed Overhead Volume Variance Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Spending VarianceWork in ProcessVariable Overhead Spending Variance Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Efficiency VarianceWork in ProcessVariable Overhead Efficiency Variance blank Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceFixed Overhead Spending Variance Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceCost of Goods Sold

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Rand Company produces dry fertilizer. At the beginning of the year, Rand had the following standard cost sheet: Direct materials (5 lbs. @ $2.60) $13.00

Rand Company produces dry fertilizer. At the beginning of the year, Rand had the following standard cost sheet:

Direct materials (5 lbs. @ $2.60)	$13.00
Direct labor (0.75 hr. @ $18.00)	13.50
Fixed overhead (0.75 hr. @ $4.00)	3.00
Variable overhead (0.75 hr. @ $3.00)	2.25
Standard cost per unit	$31.75

Overhead rates are computed using practical volume, which is 54,000 units. The actual results for the year are as follows:

Units produced: 53,000
Direct materials purchased: 265,000 pounds @ $2.50 per pound
Direct materials used: 270,400 pounds
Direct labor: 40,100 hours at $17.95 per hour
Fixed overhead: $161,800
Variable overhead: $121,900

Required:

Question Content Area

1. Compute price and usage variances for direct materials.

MPV	$fill in the blank a27afe057034ffd_1	FavorableUnfavorableFavorable
MUV	$fill in the blank a27afe057034ffd_3	FavorableUnfavorableUnfavorable

2. Compute the direct labor rate and labor efficiency variances.

Labor Rate Variance	$fill in the blank a27afe057034ffd_5	FavorableUnfavorableFavorable
Labor Efficiency Variance	$fill in the blank a27afe057034ffd_7	FavorableUnfavorableUnfavorable

3. Compute the fixed overhead spending and volume variances.

Spending Variance	$fill in the blank a27afe057034ffd_9	FavorableUnfavorableFavorable
Volume Variance	$fill in the blank a27afe057034ffd_11	FavorableUnfavorableUnfavorable

4. Compute the variable overhead spending and efficiency variances.

Spending Variance	$fill in the blank a27afe057034ffd_13	FavorableUnfavorableUnfavorable
Efficiency Variance	$fill in the blank a27afe057034ffd_15	FavorableUnfavorableUnfavorable

Question Content Area

5. Prepare journal entries for the following:

The purchase of direct materials
The issuance of direct materials to production (Work in Process)
The addition of direct labor to Work in Process
The addition of overhead to Work in Process
The incurrence of actual overhead costs

If an amount box does not require an entry, leave it blank.

a.	Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceMaterialsMaterials
	Direct Materials Price VarianceDirect Materials Usage VarianceFixed Overhead ControlMaterialsVarious AccountsDirect Materials Price Variance
	Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Usage VarianceFixed Overhead ControlAccounts Payable
b.	MaterialsVariable Overhead ControlVarious AccountsWages PayableWork in ProcessWork in Process
	Direct Materials Price VarianceDirect Materials Usage VarianceFixed Overhead ControlMaterialsVarious AccountsDirect Materials Usage Variance
	Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceMaterialsMaterials
c.	MaterialsVariable Overhead ControlVarious AccountsWages PayableWork in ProcessWork in Process
	Direct Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceDirect Materials Usage VarianceFixed Overhead ControlDirect Labor Efficiency Variance
	Direct Labor Rate VarianceDirect Materials Price VarianceDirect Materials Usage VarianceFixed Overhead ControlMaterialsDirect Labor Rate Variance
	Fixed Overhead ControlMaterialsVariable Overhead ControlVarious AccountsWages PayableWages Payable
d.	Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceWages PayableWork in ProcessWork in Process
	Direct Materials Price VarianceDirect Materials Usage VarianceMaterialsVarious AccountsVariable Overhead ControlVariable Overhead Control
	Fixed Overhead ControlMaterialsVarious AccountsWages PayableWork in ProcessFixed Overhead Control
e.	MaterialsVariable Overhead ControlVarious AccountsWages PayableWork in ProcessVariable Overhead Control
	Fixed Overhead ControlMaterialsVarious AccountsWages PayableWork in ProcessFixed Overhead Control
	Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceMaterialsVarious AccountsVarious Accounts

Question Content Area

f. Prepare journal entries for the closing out of variances to Cost of Goods Sold. If an amount box does not require an entry, leave it blank.

First, close direct materials and direct labor variances:

blank	Cost of Goods SoldDirect Labor Efficiency VarianceDirect Materials Price VarianceDirect Materials Usage VarianceDirect Materials Price Variance
	Cost of Goods SoldDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Usage VarianceDirect Labor Rate Variance
	Direct Labor Rate VarianceDirect Materials Price VarianceDirect Materials Usage VarianceVariable Overhead ControlVariable Overhead Spending VarianceDirect Materials Usage Variance
	Direct Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceVariable Overhead ControlVariable Overhead Spending VarianceDirect Labor Efficiency Variance
	Cost of Goods SoldDirect Labor Rate VarianceDirect Materials Price VarianceVariable Overhead ControlVariable Overhead Spending VarianceCost of Goods Sold

Question Content Area

Second, recognize the overhead variances:

blank	Cost of Goods SoldFixed Overhead ControlFixed Overhead Volume VarianceVariable Overhead ControlWork in ProcessFixed Overhead Volume Variance
	Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Spending VarianceWork in ProcessVariable Overhead Spending Variance
	Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Efficiency VarianceWork in ProcessVariable Overhead Efficiency Variance
	Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceFixed Overhead Spending Variance
	Cost of Goods SoldFixed Overhead ControlFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceFixed Overhead Control
	Cost of Goods SoldFixed Overhead Volume VarianceVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceVariable Overhead Control

Question Content Area

Third, close the overhead variances: Note: Close the variances with a debit balance first.

blank	Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceCost of Goods Sold
	Cost of Goods SoldFixed Overhead ControlFixed Overhead Volume VarianceVariable Overhead ControlWork in ProcessFixed Overhead Volume Variance
	Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Spending VarianceWork in ProcessVariable Overhead Spending Variance
	Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Efficiency VarianceWork in ProcessVariable Overhead Efficiency Variance
blank	Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceFixed Overhead Spending Variance
	Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceCost of Goods Sold