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Standard Costing (38 marks) After graduation from the Business Accounting program at Algonquin college, you proudly accepted a well paying position as a cost accountant

Standard Costing (38 marks)
After graduation from the Business Accounting program at Algonquin college, you proudly accepted a well paying position as a cost accountant for
Serenade Manufacturing located in London, Ontario. The following is the standard card for the company's only product:
Manufacturing Costs Standard Qty or Hrs Standard Price or Rate Standard Cost per Unit
Direct materials (metres) 4.0 $ 4.00 $ 16.00
Direct labour (DL Hrs) 1.5 $ 10.00 15.00
Variable overhead (DL Hrs) 1.5 $ 3.00 4.50
Fixed overhead (DL Hrs) 1.5 $ 7.00 10.50
Standard cost per unit $ 46.00
Denominator activity level monthly (DL Hrs) 22,500
Budgeted Fixed overhead costs monthly
For the past month of February 2022, the company proudly manufactured and sold 18,450 units. Variable and fixed manufacturing
overhead costs are applied to products on the basis of direct labour hours. All raw materials are direct materials, there are no indirect
materials. Additional actual manufacturing results, provided from the Controller, Emily Palmer, include:
Metres or Hours $
Direct materials purchased (metres) 70,022 $ 4.20 per metre
Beginning inventory of direct materials (metres) 22,100
Ending inventory of direct materials (metres) 22,000
Direct labour 29,428 $ 9.75 per hour
Fixed overhead costs $ 153,435
Variable overhead costs $ 90,000
Required:
Ms. Palmer has asked you to determine the following results for February 2022:
1. For direct materials:
a. Price and quantity variances
Price Variance $ 14,004 U
Quantity Variance $ (14,712.00) F
b. Journal entries to record activity
Journal Entries
Accounts Dr Cr
To record the purchase of raw materials
To record the usage of raw materials in production
2. For direct labour:
a. Rate and efficiency variances
Rate Variance
Efficiency Variance
b. Journal entry to record labour activity
Journal Entry
Accounts Dr Cr
To record the Direct Labour
3. Variable overhead spending and efficiency variances
Spending Variance
Efficiency Variance
4. Fixed overhead budget and volume variances
Budget Variance
Volume Variance

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