Slick Corporation is a small producer of synthetic motor oil. During May, the company produced 5,000 cases of lubricant. Each case contains 12 quarts of synthetic oil. TO achieve this level of production, Slick purchased and used 16,500 gallons of direct materials at a cost of $20,716. It also incurred average direct labor costs of $14 per hour for the 3,933 hours worked in May by its production personnel. Manufacturing overhead for the month totaled $9,186, of which $2,200 was considered fixed Slick's standard cost information for each case of synthetic motor oil is as follows.

Direct materials standard price$1.30 per gallon

Standard quantity allowed per case 3.25 gallons

Direct labor standard rate$16 per hour

Standard hours allowed per case0.75 direct labor hours

Fixed overhead budgeted$2,600 per month

Normal level of production5,200 cases per month

Variable overhead application rate$1.50 per case

Fixed overhead application rate($2,600/5,200 cases)0.50 per case

Total overhead application rate$2.00 per case

Required:

a.Compute the materials price and quantity variances.

b.Compute the labor rate and efficiency variances.

c.C. Compute the manufacturing overhead spending and volume variances.

d.Prepare the journal entries to:

1.Charge materials (at standard) to Work in Process.

2.Charge direct labor (at standard) to Work in Process.

3.Charge manufacturing overhead (at standard) to Work in Process.

4.Transfer the cost of the 5,000 cases of synthetic motor oil produced in May to Finished Goods.

5.Close any over- or underapplied overhead to cost of goods sold.

Complete this question by entering your answers in the tabs below.

Require A

Compute the materials price and quantity variances.(Indicate the effect of each variance by selecting '' Favorable'' or ''Unfavorable''. Select '' None'' and enter ''0'' for no effect (i.e., zero variance). Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.)

Materials price variance

Materials quantity variance

Required B

Compute the labor rate and efficiency variances. (Indicate the effect of each variance by selecting ''Favorable'' or ''Unfavorable.'' Select ''None'' and enter ''0'' for no effect (i.e., zero variance)

Labor rate variance

Labor efficiency variance

Required C

Compute the manufacturing overhead spending and volume variances. (Indicate the effect of each variance by selecting '' Favorable'' or Unfavorable''. Select ''None and enter ''0'' for no effect (i.e., zero variance)).

Overhead spending variance

Overhead volume variance

Required D

Prepare the journal entries to:

1.Charge materials (at standard) to Work in Process.

2.Charge direct labor (at standard) to Work in Process.

3.Charge manufacturing overhead (at standard) to Work in Process.

4.Transfer the cost of the 5,000 cases of synthetic motor oil produced in May to Finished Goods.

5.Close any over - or underapplied overhead to cost of goods sold. ( If no entry is required for a transaction/even, select ''No journal entry required'' in the first account field.)

Journal entry worksheet

1.Record the cost of direct materials charged to production.

TransactionGeneral JournalDebitCredit

2.Record the cost of direct labor charged to production.

TransactionGeneral JournalDebitCredit

3.Record entry to apply overhead to production.

TransactionGeneral JournalDebitCredit

4.Record entry to transfer 5,000 cases to finished goods in May.

TransactionGeneral JournalDebitCredit

5.Record entry to close overhead variances to cost of goods sold.

TransactionGeneral JournalDebitCredit