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STANDARD COST ACCOUNTING PROCEDURES TO BE COMPLETED During January 20XX, Speedway Toys, Inc., manufactured 4,800 toy cars. The costs of materials, labor, and overhead were as follows: Material Amount Plastic 7,050 lb at $3.60 per lb Motors 4,975 motors at $6.24 per motor Wheels and axles 4,880 sets at $.425 per set Direct Labor Molders Assemblers Hours 930 hr 1510 hr Rate $15.20 per hour $18.40 per hour Overhead Variable Fixed Amount $13,120 $12,050 You are to prepare the following for the month of January 20XX. For all variances computed, show whether they are favorable or unfavorable. B-1 Prepare a summary of materials costs. B-2 Prepare a summary of labor costs. B-3 Compute the quantity and price variances for each material. B-4 Compute the efficiency and rate variance for each type of labor. B-5 Compute the total manufacturing overhead variance. Analyze the total overhead variance, using the three-variance analysis method. B-6 Prepare entries in general journal form to record each of the following (omit explanations): a. Charge the raw materials to production and record the materials variances. b. Charge the labor to production and record the labor variances. c. Charge the manufacturing overhead to production and record the overhead variances. d. Transfer the completed units to finished goods. FIXED OVERHEAD SPEEDWAY TOYS, INC. Analysis of Fixed and Variable Overhead Costs Year Ended December 31, 20XX VARIABLE OVERHEAD PER HOUR Controllable Costs Indirect Materials $0.04 Indirect Labor 2.00 Payroll Taxes and Fringe Benefits 2.80 Utilities 0.32 Repairs and Miscellaneous 0.34 Non-controllable Costs Depreciation Insurance Total Manufacturing Overhead $5.50 $60,000 9,000 12,000 9,600 42,000 12,000 $144,600 MATERIALS BUDGET Beginning inventories of raw materials on January 1, 20XX, are expected to be as follows: Material Amount Plastic 5,500 lb Motors 4,000 motors Wheels and axles 2,500 sets Speedway Toys, Inc., would like to have enough raw materials on hand at the end of the year to equal the following percentages of 20XX budgeted requirements: Material Percentage of 20XX Budget Plastic 5% Motors 10% Wheels and axles 1% Material Plastic Motor assembly Quantity 1.5 lb per car 1 motor per car Cost per Unit $3.40 per lb $6.50 per motor $0.40 per set Cost per Car $5.10 $6.50 Wheels and axles 1 set per car $0.40 $12.00 NOTE: Paint and stickers for decorative trim are considered part of indirect materials. Data related to direct labor follow: Hours per Car Job Title Molders Assemblers 0.2 0.3 0.5 Rate per Car $15.00 $18.00 Cost per Car $3.00 $5.40 $8.40